TikTok poses serious threat to Shopee, Lazada in ASEAN: Morgan Stanley

Image credit: Tech in Asia

TikTok’s monthly active users (MAUs) across Southeast Asian markets have surpassed Shopee’s since March 2021, according to an analysis by Morgan Stanley, citing Sensor Tower data.

The report said that TikTok has an average of 227 million monthly users in the region. Although this encompasses the overall users of TikTok, the traction indicates the significant potential of its ecommerce arm TikTok Shop.

In the first half of this year, app downloads in ASEAN declined 3% year on year for Shopee, remained flat for Lazada, and increased 5% for TikTok.

Compared to its competitors, TikTok Shop charges sellers lower commission fees, so they can offer more attractive prices there than on other platforms.

Moreover, the research noted that Shopee and Tokopedia haven’t responded aggressively to the presence of TikTok Shop. This is due to the former two’s focus on profitability, and customers who have switched to TikTok are perceived to have lower average order values and profitability.

Based on the performance of livestreaming platforms in China, Morgan Stanley believes that TikTok Shop can gain share in non-standardized product categories such as apparel, cosmetics, and jewelry in Southeast Asia.

Meanwhile, standardized products like appliances are “relatively less suitable for livestreaming platforms,” the paper added.

Venture builder firm Momentum Works predicted that TikTok Shop is targeting a gross merchandise value of US$15 billion this year in the region, which would imply approximately a 10% market share there.

See also: Can TikTok Shop catch up with Shopee, Tokopedia in Indonesia?