TikTok, the popular video app owned by China’s ByteDance, is making strategic moves in Southeast Asia.
In some countries, Tiktok faces challenges : it was banned in India in 2020 and is under threat in America.
To bolster its fortunes, TikTok is eyeing Southeast Asia’s nearly 700m consumers.
But TikTok’s ambitions in South-East Asia go beyond silly dance videos.
TikTok is advancing into e-commerce with TikTok Shop, allowing direct product purchases within the app.
In 2022 products worth USD 5 billion were sold globally on TikTok’s platform. In 2023, the target is USD 20 billion, with 75% coming from Southeast Asia.
With already over 300 million users in Asean, TikTok’s e-commerce venture aligns well with the online shopping habits of Southeast Asians.
Established local players like :
Shopee (Singaporean Sea group),
Lazada (Chinese Alibaba),
Tokopedia (one of Indonesia’s unicorns),
have a more diversified product range.
They also have invested in robust logistics and payment systems to get around Southeast Asia’s tricky peninsular and archipelagic geography.
This allow them to operate more efficiently than TikTok, which relies on external suppliers to store and ship products.
While TikTok’s powerful financial backing from ByteDance is a considerable advantage, it faces fierce competition from regional incumbents.
For example, Lazada got an injection of USD 845 million from Alibaba in July 2023 for Asean.
In Indonesia, there is a heated debate about how to regulate TikTok Shop whose model allows it to escape certifications and taxes, harming millions of local microenterprises, especially in the textile sector.
The battle for Southeast Asia’s online shoppers is only getting started.
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