Shopee and Lazada have managed to establish themselves in Southeast Asia as great leaders in the e-commerce sector, However, this may be over. TikTok’s parent company ByteDance is holding Big financial investment to promote Tiktok shop in South East Asia.
TikTok Shop is the tool that TikTok has launched in some countries to start selling products directly from its platform and help brands reach out to their consumers. Some of the countries where they are present are in the US and India.
The TikTok Shop is present in six countries in Southeast Asia by 2022: Singapore, Malaysia, Indonesia, Philippines, Vietnam and Thailand, Territories where Shopify gained a large presence in recent years, but has gone on the defensive since April, according to CNBC, due to increased sales of the TikTok shop. ,TikTok continues to grow rapidly in Southeast Asian countries. We estimate that the gross value of TikTok merchandise will reach 20% or more of Shopee’s in 2023“, Said Shawn Yang, analyst at Blue Lotus Research InstituteIn a recent report by Shopee owner C Group.
The information outlet shared that the GMV of TikTok Shop is set to grow more than fourfold in 2022, reaching $4.4 billion in Southeast Asia. He also shared that the company aims to reach $12,000 million in its GMV by the end of the year.
According to market research company Insider Intelligence, the number of users of Tiktok in Southeast Asia is now 135 million. The country with the most users, closely followed by the United States.
One of TikTok Shop’s most powerful strategies when entering a new market is to eliminate commission, opting to charge 1% for each purchase. Shopee charges a 5% plus fee for each sale.
Shopee has a strong GMV
TikTok Shop’s current GMV represents a tiny fraction compared to Shopee ($73.5 billion in 2022) or Lazada ($21 billion by September 2021). However, a survey by Cube Asia showed that consumers who spend on the TikTok shop are reducing their spend on Shopee (-51%), Lazada (-45%), offline (-38%). So Shopee has to keep working to keep from falling off the throne.
C Group is relying on its e-commerce line of business, Shopee, to do well in this area, as its gaming company is increasingly underperforming. Garena, their gaming company, which is one of the most powerful business lines of the brand, is facing a drop in revenue due to the ban on its most famous game Free Fire in India.
Meanwhile, after ceasing operations in several countries such as Spain, Shopee is working to expand its presence in Malaysia and Brazil.
While TikTok fights to not be banned in the country in the United States. in March, TikTok CEO Shou Zi Chew appears before US Congress to defuse tensions, But that’s not enough to stop Montana from banning the platform. TikTok was also banned in India in 2020.
