For many Indian users and sellers on Shopee, Southeast Asia’s largest social e-commerce platform, the company’s announcement that it would be shutting down local operations came as a shock. Mohd Ikram Ansari, a 19-year-old decorative hookah seller on Shopee who has stocked up for the platform’s “Mega Free Shipping Sale” promotion event on April 4, was so startled to see a closure notice on the company’s Instagram account on Monday that he initially thought it was an early April Fool’s joke. The college student joined Shopee last December and has been making around 50,000 rupees (US$685) from the platform every month after tax, which accounts for about 35 per cent of his monthly income. “Indian sellers [are suffering a] heavy loss,” he said, adding that he still has 200,000 rupees worth of seller payments on the app. Shopee has about 20,000 sellers in the country. Chinese beauty brands expand e-commerce footprint in Southeast Asia Many other sellers and consumers also inquired about refunds, orders and seller payments through social media. The company responded that it was “not able to disclose why Shopee India will be ceasing its operations”, adding that orders placed before Tuesday will still be fulfilled and support will still be available. “In view of global market uncertainties, we have decided to close our early-stage Shopee India initiative,” a Shopee spokesman told the South China Morning Post . The decision to retreat from the market comes as Singaporean owner Sea has faced other challenges in India over suspected China ties, but Shopee denied that local regulations were a factor. “This decision regarding Shopee India has nothing to do with regulatory matters,” the spokesman said. The company did not respond to questions about how it plans to handle its 300 local employees. In February, the mobile video game Free Fire , from Sea-owned game publisher Garena, was one of 54 apps the Indian Ministry of Electronics and Information Technology banned over ties to China. Free Fire allegedly sent data to Chinese servers. Since 2020, India has banned more than 200 Chinese apps, including Tencent Holdings ’ super app WeChat and ByteDance ’s short-video sharing platform TikTok . One local industry group that opposed Shopee’s presence in India was quick to celebrate the company’s withdrawal. The trade body Confederation of All India Traders (CAIT) said on Twitter that it “welcomes … Shopee’s exit from India”. CAIT’s general secretary Praveen Khandelwal warned Indian Prime Minister Narendra Modi about Shopee in a letter last September, a month after the e-commerce firm announced it would be entering the market. “Entry of the likes of Shopee means compromising data and security of Indian citizens, flooding of the market with Chinese goods, anticompetitive tie-ups with large manufacturers with exclusive access – all of which will strike at the belly of our small trader who is already suffering from the impact of Covid on their businesses,” Khandelwal wrote in the letter, which he posted on Twitter. In the same letter, he said Shopee’s entry violated India’s Foreign Direct Policy because it is “owned and controlled by the Chinese people”, pointing to the founder’s birthplace and shares owned by Chinese tech giant Tencent Holdings. Born in Shanghai, Sea Limited co-founder and CEO Forrest Li moved to Singapore 17 years ago, later becoming a naturalised citizen. The 44-year-old entrepreneur founded Garena in 2009 and Shopee in 2015. Sea Limited was listed on the New York Stock Exchange in 2017. While shedding some of its e-commerce holdings three months ago, Tencent cut its stake in Sea to 18.7 per cent from 21.3 per cent, reducing the Chinese gaming and social media giant’s voting power to below 10 per cent. Shopee’s five-month stint in the world’s second most populous country was accompanied by constant political pressure. Despite this, the platform was quickly embraced by local users, making it the No 2 app in India in January and February, behind downloads of the app Meesho, according to market intelligence platform Sensor Tower. In November, the Delhi High Court and the Public Interest Litigation sought to block Sea’s locally registered company SPPIN India Private Limited, which operates Shopee India’s website and mobile app, alleging that the company threatens national security, local publication The Economic Times reported. India had the world’s eighth largest e-commerce market in 2020, valued at about US$60 billion, which is projected to balloon to between US$120 billion and US$140 billion by 2026, according to the state affiliated Indian Brand Equity Foundation. The country’s top e-commerce platforms include Amazon.com’s India site, Walmart-owned Flipkart, Snapdeal and Myntra. Some local Shopee merchants are now turning to these platforms. Ansari, the hookah seller, said he has started selling on Amazon but had just five sales over the course of a week, despite leaving a note for his Shopee customers. “Please visit M.A Collections on Amazon after Shopee ban,” a notice on his Shopee page reads.