HIGHLIGHTS: Forrest Li - CEO of Sea

0:01Hi, everybody. Tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. Hi, everybody. I'm Nikolaj Tangen, the CEO of the Norwegian Sovereign Wealth Fund. And today, we are in really, really good company. We are in Singapore. We're talking to Forrest Lee, the founder and the CEO of Sea, which is the largest tech company in Southeast Asia. A market leader in video game distribution and in fintech and in e-commerce. An incredible journey. And a big thank you for taking the time. Welcome to Singapore, Nikolaj. Thank you for visiting us. I also should say that in the fund, we are a big shareholder in C, and so we follow it very, very closely.

0:42But first of all, for those in Europe and the US who don't know C, what do you do? Yeah, C is a Singaporean technology company with the mission to better the lives of consumers and small businesses through technology. So we are a technology company by heart, and it has been 16 years when we started the company. and we primarily focus on Southeast Asia market as the first market. And later on, we also enter into some new market like Taiwan, like Brazil. Actually, interestingly, we've chosen the name C as our company name. It's actually a short form of Southeast Asia. This is a kind of a shout out of our home market.

1:27We feel very proud of that. And today we primarily operate three businesses, video game business named Garena and an e-commerce business named Shopee. And more recently, the fintech business named Money. And for Garena, it started as just a game distributor in Southeast Asia. But later on, we evolved into becoming one of the largest mobile game developer and publisher in the world. and a self-developed game from Garena named Free Fire. And you have something like 100 million people playing this every day, right? Yeah, Free Fire, like today, is the largest mobile game in the world by daily active users.

2:09As you mentioned, more than 100 million people play the game from over 130 countries on a daily basis. Do you play it? Yeah, I play it a lot. But you were a video game distributor. How did you come up with the idea of going into e-commerce. Just what was the thinking behind that? Yeah, it's down to what is the fundamental value and the technology can bring. And I remember, interestingly, actually 10 years ago, and sometimes I brought my family to China for holidays. And at that time, I have a six-year-old daughter. So we are very, very impressed by how much e-commerce has developed, especially the mobile e-commerce developed in China.

2:57So on our trip, and sometimes my daughter wants this, wants that, no matter what, she wants it. And it's just a few kind of taps and swaps on her mom's phone, and the box just delivered to the door the next day. And whatever she wants, she wants it, will be in the box. To her, this is magic. And I give a lot of thoughts about it when we came back to Singapore. And I think this is just a great business. And it creates so much value and creates so much joy and convenience to consumers. And it's hard for me to swallow the fact such business, such thing doesn't exist in Southeast Asia. What do you think is going to be the future development in this business?

3:41What are the next developments? I think fundamentally, the core of the e-commerce is how do you make sure it's number one, it's more affordable and more accessible to more people, to have more people to enjoy the benefit of the e-commerce. And this is related to a lot of work in the supply chain, like optimizations. At this moment, if we are not just matching whatever the merchandise with the customers, We also put a lot of effort to work with a lot of upstream suppliers and how to make their product more attractive, more competitive. We provide a lot of them the market information, what really customers want, and to help them to do better businesses.

4:28And again, so delivery is a big thing. It's a very, very important part in the whole e-commerce experience. And there's still a lot of more we can do. And you can always make it cheaper and faster. The third area you have is fintech. Tell us what are you doing there? Oh, this is amazing and it's a very, very exciting business. And we think we have a full potential there. And I mean, we started this business actually by resolving a lot of issues we have, the challenge we have for our video game business and for our e-commerce businesses. And in the early days, even though we published the games and we have the best games from all over the world.

5:11But because of the people, no credit card, and for the gamers, they have no way to pay us. And we have to build up a cash card, like a gift card network ourself as a game company. It's a payment network. I remember the days I drive my car with all the bags of a credit card to go around 7-Eleven to distribute and to count how many cards I have in the stock and how much money I receive. And later on, for e-commerce, online transaction has become a big challenge as well. And there's so many transactions and how you want to make sure the transaction is all smooth in such a large scale and in a very, very safe way.

5:54So that's all the challenge we started with. So that's why we built up a lot of solution and product under the money, our fintech business umbrella, to solve these issues. But actually, increasingly, we see a very, very big opportunity. It's because of our e-commerce businesses. We realize when people want to buy things, and they really don't have much access to the consumption credit. And such an issue has been largely resolved in most of the Western market by credit card. But as you know, the credit card penetration is relatively low in most of the market we operated in. So people just do not have access to credit.

6:31And that's why we introduced through our Shopee purchase and we introduced this credit line for them. They can just buy things now, but pay it later. So in some other Western market, this is just a supplementary to the credit card. But here, it's become a major main solution. So, even within a very short period of time, money is already the largest digital lender for the consumer consumption in Southeast Asia. And we already have over$7 billion loan book and it's growing very, very rapidly. Moving on to corporate culture, how would you define the corporate culture in C? We have five core values.

7:18When you walk into the office, you may see the value So we have that war in every single office. We want to make sure it's very, very visible. It's a reminder to all the employees on a daily basis. The five things we serve, we always want to make sure customer comforts, whatever we do, we have the customer service mentality and we run. We highly value execution. Speed matters. And if we get things done today, we're not going to wait till tomorrow. And if we can run, we will not work. and we adapt and we know we are in a very, very dynamic environment and it's highly competitive and the technology changes so fast.

7:58As you just mentioned, the share price can go five times and can go down like 70, 80, 90%. So it's a very, very changing environment. So we need to make sure we can always adapt and we commit. So like whatever you want to achieve, right? It doesn't matter if it's a hundred billion dollar market cap or trillion billion dollar, whatever things you do and you want to be committed. That is the only way you can achieve excellence. And actually, the last one is we stay humble. And I believe this is the foundation of our core values, the culture. And if you have to pick one word to describe our corporate culture, and that will be humility.

8:41I think it's a guide us in a good time. Why is it important to be humble? Well, I mean, I think it's interesting. And that is even before I started the company. And I was a Stanford student. And I was fortunate enough to see in the audience when Steve Jobs gave this very famous commencement speech, Stay Foolish and Stay Hungry. And he shared three amazing personal stories. But my takeaway from that story, all this speech, actually is advice to the young, fresh graduate. And it's a calling for humanity, right? because you have to be humble and to stay humble to stay foolish. Right. And you have to acknowledge, okay, you are probably not the smartest ones and there are a lot of things can be done better.

9:25You should keep learning. And you have to be humble to stay hungry. Right. And to try to achieve more, it's not enough. And there's more things we can do. And that's a very, very good reminder to me as a person. And also it's how I want to run my company. So this is very, very important, I think, to keep driving the company, keep moving forward.