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Jofie Yordan · · 6 min readCan TikTok Shop catch up with Shopee, Tokopedia in Indonesia?
TikTok Shop has taken the Southeast Asian ecommerce market by storm. In the past year, the platform has grown rapidly and become a threat to the region’s incumbents.
Indonesia is the most important market in the region for TikTok Shop. In 2022, it recorded a gross merchandise value (GMV) of US$2.5 billion from the country, according to a report by venture builder Momentum Works. This was 57% of the total GMV generated by the social commerce platform in Southeast Asia, which stood at US$4.4 billion.
As of April this year, the main TikTok app had 113 million active users in Indonesia – its second-largest market in the world.
Despite its strong performance in the country, TikTok Shop remains a minnow compared to Shopee and Tokopedia in terms of market share.
Even so, an executive from a major ecommerce firm in Indonesia acknowledges that TikTok Shop poses a real threat to existing marketplaces.
In fact, the executive observes that transactions for players like Shopee and Tokopedia have been “greatly affected” by the rise of TikTok Shop, especially in the lifestyle and beauty categories.
“TikTok Shop truly leverages its positioning as a powerful social media platform. It is highly suitable for impulsive lifestyle products,” the executive, who declined to be named, tells Tech in Asia.
While Shopee and Tokopedia have been tightening their expenses to retain and achieve profitability, respectively, TikTok Shop has been offering significant subsidies, resulting in numerous promotions and discounts on the platform.
Spikes in lifestyle and beauty
According to Hadi Kuncoro, co-founder and CEO of omnichannel enabler Power Commerce Asia, the sales of several Indonesian lifestyle and beauty brands on TikTok Shop started to exceed sales on other ecommerce platforms in the second quarter of this year.
Kuncoro tells Tech in Asia that some of Power Commerce Asia’s clients in the lifestyle category have started focusing on TikTok Shop as one of their main revenue generators.
Indeed, Momentum Works’ latest report shows that in April, TikTok Shop’s top-selling products in Indonesia by sales volume were moisturizers, sunscreens, hijabs, and water bottles.
Meanwhile, Indonesia-based cosmetics firm Esqa previously told Tech in Asia that its sales on TikTok Shop increased 6x from November 2022 to April 2023.
Heavily reliant on promos
Becoming sellers’ favorite
Long way to go?
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TikTok Shop is growing rapidly in Southeast Asia, particularly in Indonesia, where it captured 5% of the country’s ecommerce market share last year.
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