TikTok’s ‘Everything War’ in Southeast Asia

Over the past two years, TikTok Shop has shaken up Southeast Asia’s ecommerce market. Now, it is attempting to repeat the same feat with local services.

In China, local life services are online platforms that connect users to nearby offline merchants, such as restaurants, grocery stores, travel agencies, or beauty salons. For instance, a user watching a livestream of a flower shop on Douyin (TikTok’s Chinese version) can have flowers delivered from nearby stores on demand.

In the country, the sector is estimated to be worth US$350 billion by 2025, with Meituan, Ele.me, and Douyin leading the space.

Last year, Douyin reported a 256% increase in gross merchandise value (GMV) for its local services business. As of January, it has over 4.5 million offline merchants connected to its app.

For now, TikTok is only testing local services features in Indonesia and Thailand, where users can order food, drinks, buy dine-in vouchers, and book hotels within the app.

This feature will likely be rolled out to other markets in the region, mirroring the firm’s strategy with TikTok Shop. The company is already hiring for several positions in its local services division in Singapore.

See also: TikTok Shop narrows gap with Shopee, but the honeymoon could be over

Unlike the ecommerce sector, where TikTok has had to fight off heavyweights like Shopee and Lazada, the battleground for local services seems wide open in Southeast Asia. Does that mean the fight will be less heated?

Worth a bet?

At the moment, TikTok is partnering with third-party platforms like Gojek’s GoFood and Agoda to offer local services in Indonesia.

Some merchants, like Kopi Kenangan and Tomoro Coffee, also allow users to purchase dine-in vouchers on the TikTok app. However, customers are directed to third-party platforms or merchants’ official websites to complete these transactions.

Tech in Asia has reached out to TikTok, but it declined to comment on how it plans to monetize the new features after the pilot period. A company spokesperson says, however, that the firm is “exploring new ways to help local businesses build their presence on the platform.”

Questions on delivery

Ecommerce is still the focus

“Everything war”