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Thu Huong Le · · 7 min readExplaining TikTok’s ecommerce bet in Southeast Asia
As a veteran marketplace seller, Vu Minh Tra has to stay on top of the latest ecommerce trends. So when TikTok Shop began trials in Indonesia last year, Vu anticipated that the China-owned platform would eventually roll out the same feature in Vietnam.
Photo credit: ByteDance
“This market has so much potential,” says Vu, one of the best-known key opinion leaders in Vietnam’s ecommerce community. “This is the right time for TikTok Shop to enter Vietnam since both consumers and sellers have become much more mature.”
In February, TikTok Shop officially entered Thailand, Vietnam, and Malaysia, and has been making a big push to hire local teams. The platform is reportedly working on functions to enable cross-border ecommerce for merchants in selected Southeast Asian countries.
These moves follow earlier launches in Indonesia, the UK, US, and Canada in 2021.
TikTok has many reasons to be confident about its ecommerce potential. With 1 billion users worldwide, TikTok’s advertising business is forecast to reach US$11 billion in 2022, which would surpass both Twitter and Snapchat’s numbers combined.
In-app online shopping on Douyin, the Chinese version of TikTok, amounted to an impressive US$26 billion in 2020.
The question is whether TikTok Shop can create the same magic in Southeast Asia?
Stirring up the party
It makes sense that TikTok Shop has prioritized Southeast Asia early on.
Firstly, the region’s ecommerce spending is poised to grow faster than anywhere else in the world, and sales could reach US$90 billion this year, according to eMarketer Global Ecommerce Forecast 2022.
Image credit: Timmy Loen
Secondly, a significant chunk of regional users are already addicted to TikTok. It ranked among the most popular apps in Southeast Asia, according to Data.ai’s State of Mobile 2022 report. Based on downloads, it was the standout winner in Indonesia, Malaysia, and Thailand.
How does it work?
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Should Shopee or Lazada be worried?
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Users in the region are already addicted to TikTok. Will TikTok Shop be as big of a hit?
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