- Premium Content It takes our newsroom weeks - if not months - to investigate and produce stories for our premium content. You can’t find them anywhere else.
Jofie Yordan · · 7 min readTikTok Shop narrows gap with Shopee, but the honeymoon could be over
Just two years after its launch in Southeast Asia, TikTok Shop – the ecommerce unit of the popular short-video app – is rapidly closing the gap with Sea Group’s Shopee, the leading player in the region.
TikTok Shop’s gross merchandise value (GMV) nearly quadrupled to US$16.3 billion in 2023 from US$4.4 billion in 2022, venture builder Momentum Works estimates in a recent report. Ecommerce generated US$0.7 billion in revenue for TikTok’s Asia-Pacific unit in 2023, according to the company’s regulatory filings in Singapore.
Photo credit: TikTok Indonesia/Facebook
Although Shopee’s US$55.1 billion GMV is still far from its reach, TikTok Shop has emerged as the most noteworthy challenger, especially after its highly publicized merger in Indonesia with local player Tokopedia in December 2023.
To be clear, Lazada’s US$18.8 billion GMV in 2023 means that it remains the second-largest ecommerce platform in Southeast Asia. However, TikTok Shop and Tokopedia’s combined GMV in 2023 topped US$32.6 billion.
However, the future looks challenging for TikTok Shop for several reasons.
For one, the platform – owned by China-based tech titan ByteDance – has begun cutting back on subsidies for discounts and promotions across markets in Southeast Asia. Shopee continues to aggressively invest in livestreaming and video, potentially encroaching on TikTok Shop’s core strength.
In Indonesia, ByteDance is still busy addressing internal matters following its deal with Tokopedia. This includes rebranding TikTok Shop to Shop Tokopedia in the country as well as restructuring and integrating the two teams, which resulted in job cuts last June that affected hundreds of Tokopedia employees.
At the same time, several countries in Southeast Asia have started tightening regulations for cross-border ecommerce and livestreaming.
So will this momentum last for TikTok Shop?
“The threat is real”
In its report, Momentum Works stated that TikTok Shop has “taken a large portion of Shopee’s potential growth” and “the threat is real.”
Image credit: Timmy Loen
The end of subsidies?
More regulatory headaches?
US or SEA?
Stay ahead in Asia’s tech landscape
This is premium content. Subscribe to read the full story.
Market leader Shopee continues to aggressively invest in live commerce to counter TikTok Shop. Will the social commerce platform sustain its growth?
We know this is not ideal. ⌛ Sign up in 20 seconds. Cancel anytime.
Our subscriber community includes professionals from these companies:
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
