TikTok Shop to capture 13.2% of SEA ecommerce market share: report

TikTok Shop’s offline activity in Jakarta / Photo credit: TikTok

TikTok Shop is projected to capture a 13.2% share of the ecommerce market in Southeast Asia this year, according to a study from venture builder firm Momentum Works that is not yet publicly available.

The ecommerce arm of TikTok is on course to reach its US$15 billion gross merchandise value (GMV) target in 2023 – a significant jump from the previous year’s US$4.4 billion, Momentum Works’ paper showed. This would place TikTok Shop’s market share in the region at the same level as Tokopedia, estimated at 13.9%, and Lazada, estimated at 17.7% this year.

The best-selling categories on TikTok Shop are beauty and personal care, accounting for 84% of products sold and 70% of its GMV. According to the report, beauty brands or sellers are bundling products to increase their average order value.

Weihan Chen, insights lead at Momentum Works, believes that whether TikTok Shop poses a threat to incumbent platforms “might not be a standalone question at all.”

“The bigger narrative is that in ecommerce, where leading players seem to have a network effect and structural advantage, disruption can still happen, and the incumbents should always remain focused and vigilant,” Chen said in a statement.

Shopee, which Momentum Works estimated to retain a 46.5% market share this year, has expressed its intention to focus on its live shopping feature. This move would put the Singapore-based ecommerce giant in even tougher competition with TikTok.

In Sea Group’s latest earnings call, CEO Forrest Li said that Shopee recorded a 12x growth in transaction volumes during its 7.7 livestreaming campaign in Indonesia compared to a regular day.

See also: TikTok Shop’s logistics dilemma: to build or not to build