The TikTok Shop poses a growing threat to major e-commerce players such as Shopee and Lazada in Southeast Asia.
This comes as parent company ByteDance pushes its short-video app to markets outside the US and India, creating an alternative revenue stream.
Related investment news

TikTok Shop is the e-commerce marketplace for short-video app TikTok, owned by Chinese technology giant ByteDance. Shopping apps allow merchants, brands, and creators to showcase and sell their products to users.
In 2022, TikTok shops will expand to six Southeast Asian countries: Singapore, Malaysia, Indonesia, Philippines, Vietnam and Thailand.
“TikTok continues to grow rapidly in Southeast Asian countries. We expect TikTok to grow by 2023.” [gross merchandise value] will reach ~20% of Shopee’s, which we suggest has triggered Shopee’s defensive sales and marketing growth since April,” said Sean Yang, an analyst at the Blue Lotus Research Institute. He said in a recent report on Shopee’s owner Sea Group.
TikTok did not comment or provide figures.
According to internal data obtained by tech outlet The Information, the TikTok Shop’s GMV, or total merchandise sold, will more than quadruple in Southeast Asia in 2022 to $4.4 billion. The TikTok shop is It is reportedly aiming for a GMV target of $12 billion by 2023..
Seeing content and making impulse purchases is an advantage of TikTok.
Sachin Mittal
Head of Research, Telecommunications and Internet Division, DBS Bank
To be clear, TikTok Shop’s current GMV is just a fraction of Shopee and Lazada.
Shopee earns $73.5 billion in profit According to available public figures, Lazada’s GMV was $21 billion in the year to September 2021, compared to $21 billion in 2022.
growing threat
A TikTok spokesperson told CNBC that TikTok shops “continue to grow rapidly” as both large and small users use the platform to acquire new customers. . TikTok is “focused on the continued development of TikTok shops in Southeast Asia,” a spokesperson said.
As of May, there were 135 million TikTok users in Southeast Asia alone, according to market research firm Insider Intelligence.
According to Statista, Indonesia has the second largest population of TikTok users after the United States.
Indonesia is the most populous country in Southeast Asia, with 52% young people. About 113 million TikTok users.
Sachin Mittal, head of research for telecommunications and internet at DBS Bank, told CNBC that “impulse buying from watching content is an advantage of TikTok.”
sea group Given the lack of a strong gaming pipeline and the continued national security ban on flagship game Free Fire in India, we expect e-commerce arm Shopee to improve the group’s balance sheet as gaming arm Garena’s revenues continue to decline. there is threat.
Shopee is expanding its footprint in Malaysia and continues to strengthen its operations in Brazil after exiting several markets in Europe and Latin America.
TikTok currently spends an incredible amount of money on incentives to onboard buyers and sellers, which may not be sustainable.
Jonathan Wu
Phillip Securities Research Senior Analyst
A study conducted by online retail insights company Cube Asia found that: Consumer spending on TikTok shops Indonesia, Thailand, and the Philippines cut spending on Shopee (-51%), Lazada (-45%), and Offline (-38%).
Shopee and Lazada declined to comment on their competition with TikTok Shop.
Shopee is currently the largest online marketplace in Southeast Asia, holding 30% to 50% traffic share across Southeast Asia in the past three months, according to data from web analytics firm Similarweb, while Lazada has 10% to 30%. It was revealed that it holds the second place in the traffic share of . .
Scrutiny on TikTok
The TikTok Shop move comes as the app comes under scrutiny in its biggest market, the United States, amid rising geopolitical tensions and a technology race between China and the United States.

TikTok CEO Shou Zi Chew testified before Congress in March about the app’s ties to China and the adequacy of an emergency plan to keep US data on the mainland, “Project Texas.” Lawmakers’ concerns about sex remained unresolved.
TikTok, along with other apps allegedly of Chinese origin, have been banned in India since 2020. Although not accessible in China, the Chinese version of Douyin is widely used by over 750 million daily active users.
not sustainable
But TikTok is spending cash on growth, a tried and tested strategy for gaining market share.
“TikTok currently spends an incredible amount of money on incentives to encourage buyer and seller participation, which may not be sustainable,” said Jonathan Wu, senior analyst at Philip Securities Research. There is,” he said. Wu said he estimated the incentive would be $600 million to $800 million annually, or 6% to 8% of $10 billion in GMV in 2023.
To encourage merchants to join the platform, TikTok shops Waive fees when launching in Singapore In August. The seller only had to pay his 1% payment commission.
Data from app analytics firm Apptopia found that downloads of the TikTok Shop Seller Center app have increased in Indonesia over the past year.
On the other hand, Shopee charges more than 5% as fees, transaction fees and service fees.
A CNBC check revealed that Nomieo’s four-ply toilet paper was sold on TikTok for S$5.80 for 27 rolls. By comparison, Shopee sells the same product for around S$16.80.
Wu noted that TikTok Shop is “still very young” and “in the stage of burning capital to grow, which may not bode well in today’s market given the high cost of financing.” bottom.
TikTok Shop has also invested heavily in improving logistics for faster deliveries and returns, unlike Shopee and Lazada, which have increased the overall user experience and confidence of sellers and buyers. It’s also just a platform with no two-end capabilities,” he said.
Overall, I think the TikTok Shop has the potential to be as big as Shopee and Lazada, but it may take many years.
Jonathan Wu
Phillip Securities Research Senior Analyst
It also has a small user base and young demographic at the moment, which means less spending capacity, Wu said.
“I don’t see TikTok as a big risk for Shopee,” Mittal said. “Shopee can afford to lose some market share, but Lazada cannot.”
Lazada has been trying to catch up to Shopee since Shopee overtook it in 2020 to become the largest e-commerce platform in Southeast Asia.
“Overall, I think the TikTok Shop has the potential to be as big as Shopee and Lazada. Pointed out the difference in Shopee’s GMV.