Just a year after TikTok’s e-commerce partner was set up, it achieved major commercial success in Southeast Asia, thus boosting TikTok’s emergence into shopping online.
An expert on startups in Singapore stated that right after TikTok shop examined business in Indonesia in 2021, it grew its business by leveraging the mass of customers of the common video-sharing app.
Though it is still behind competitors like Shopee and Lazada, TikTok Shop had the most rapid expansion rate, increasing its gross merchandise value (GMV) i.e., the summation cost of all proceeds, adding called-off, returned, and repaid orders marking a sevenfold increment from 600,000 dollars in 2021 to 4.4 billion dollars in 2022.
The head of insights at Momentum Works, Weihan Chen quoted to AFP, “You can think of it as TikTok already having a captive audience coming onboard for entertainment trying different means to convert them and their attention into the purchase and GMV.
Weihan Chen further said that TikTok Shop, rapidly grew from Indonesia into 5 extra Southeast Asian retailers, that had large TikTok followers and worked on upgrading its commercial capacity.
TikTok is owned by Chinese technology giant ByteDance.
Basically, in 2022, the gross merchandise value of 9 of the top Southern Asian online commercial platforms was estimated at around 100 billion dollars. This 14% on-year increment was conducted by a unit company of China’s Alibaba called Shopee and Lazada located in Singapore.
What attributed to about 47.9 billion of that amount which was a 13% increment was Shopee, a unit company of Singapore’s Sea Ltd.
The second and third position was Lazada and Tokopedia respectively with Lazada estimated at 20.1 billion dollars which was a drop from its 2021 estimate of 21 billion dollars. The latter was estimated at 18.4 billion dollars which only tends to Indonesian commercial centers.
Meanwhile, Southeast Asia’s largest commercial center is Indonesia, which is about 52% of all the GMV in the area.
A reasonable rise in commercial activities of offline shopping came about after the Covid-19 ban was upturned. However, there is hope for a continuous rise in activities.
A lessened dependence on US commerce and avoidance of growing competition in the region may give an advantage to Chinese firms and production firms entering foreign countries
“That might be a real game changer for Southeast Asia’s e-commerce landscape, which has for a long time suffered from a lack of variety of goods,” it said. The company is projecting entering into African market.
