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A merchant sells crystal ornaments via a live TikTok broadcast.
CFOTO | Future Publishing | Getty Images
TikTok Shop is a rising threat to major e-commerce players such as Shopee and Lazada in Southeast Asia.
It comes as its parent ByteDance pushes the short video app in markets outside the U.S. and India to create alternative revenue streams.
TikTok Shop is the e-commerce marketplace of short video app TikTok, which is owned by Chinese tech giant ByteDance. The shopping app enables merchants, brands and creators to showcase and sell their goods to users.
In 2022, TikTok Shop expanded to six Southeast Asian countries — Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand.
“TikTok continues to grow rapidly in Southeast Asian countries. We estimate that TikTok’s 2023 [gross merchandise value] will reach 20%~ of Shopee, which we suggest prompted Shopee to defensively increase sales and marketing since April,” said Shawn Yang, analyst at Blue Lotus Research Institute, in a recent report on Sea Group, the owner of Shopee.
TikTok did not want to comment or reveal numbers.
TikTok Shop’s GMV, or total value of goods sold, skyrocketed more than four times to $4.4 billion in Southeast Asia in 2022, according to internal data obtained by tech media outlet The Information. TikTok Shop is reportedly aiming for a GMV target of $12 billion by 2023.
Impulse buying from watching content is an advantage TikTok has.
Sachin Mittal
Head of telecom & internet sector research, DBS Bank
To be clear, TikTok Shop’s current GMV is only a fraction of Shopee and Lazada’s.
Shopee netted $73.5 billion in GMV in 2022 while Lazada’s GMV was $21 billion for the year through September 2021, according to available public figures.
Rising threat
A TikTok spokesperson told CNBC that TikTok Shop “continues to grow rapidly” as both large and small users use the platform to reach new customers. TikTok is “focused on the continued development of TikTok Shop in Southeast Asia,” said the spokesperson.
As of May, the number of TikTok users in Southeast Asia alone is 135 million, according to market research company Insider Intelligence.
Indonesia has the second largest population of TikTok users after the U.S., according to Statista.
Indonesia is Southeast Asia’s most populous country, where 52% are young people and it has around 113 million TikTok users.
“Impulse buying from watching content is an advantage TikTok has,” Sachin Mittal, head of telecom & internet sector research at DBS Bank,…
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