TikTok plans to expand the size of its global e-commerce business to USD 20 billion in merchandise sales this year, as it rapidly expands its influence overseas.
TikTok CEO Shou Zi Chew (周受资) said at a Southeast Asia forum event that the company will invest billions of dollars in the region in the next few years to strengthen the influence of its popular video apps in Southeast Asia.
Southeast Asia is known as the first stop for Chinese e-commerce. In Southeast Asia, the current policy environment is very favorable for cross-border e-commerce. Especially under the promotion of RCEP policy, cross-border e-commerce has ushered in new development opportunities. Factors such as the demographic dividend and the popularity of mobile Internet have significantly improved the coverage and use of e-commerce in Southeast Asia. However, due to the high complexity of the region, SHEIN and Shopify and other independent stations in Southeast Asia not only have to postpone the expansion of business but also face the challenge of layoffs and business reduction, creating a relatively good environment for TikTok's e-commerce business expansion.
According to relevant statistics, TikTok Shop's GMV in Southeast Asia reached USD 4.4 billion in the past year, an increase of more than four times compared with 2021. In the Indonesian market, TikTok Shop's GMV growth rate even reached 493%. Compared with the European and American markets, users in Southeast Asia are more able to accept the model of live e-commerce. Therefore, launching TikTok Shop in Southeast Asia is the best way to adapt to the needs and pace of the local market.
Half of the top 10 e-commerce platform companies in Southeast Asia are from Vietnam, followed by Indonesia. These enterprises are mainly comprehensive e-commerce, followed by electronic products and food products. At the same time, there is still a huge flow dividend in the field of digital marketing, and live e-commerce is rapidly emerging. In terms of social software competition, many companies are focusing on developing short video businesses, and an increasing number of companies are independently developing live business lines in response to this development trend.
Across Southeast Asia, more than 325 million people visit TikTok every month, and 15 million businesses use the platform. Indonesia has nearly 113 million TikTok users, second only to the United States globally. This investment behavior will help to deepen the live shopping model into the local market of Southeast Asia, improve the conversion rate of flow, accelerate the growth of merchants on the platform, and thus drive the continuous improvement of the new ecosystem of TikTok Shop e-commerce.
According to the data, as of the third quarter of 2022, the number of TikTok Shop stores has exceeded 130,000. Among them, the Indonesian market accounts for the biggest with 54% of the total. Then Vietnam, Thailand, Malaysia, and the Philippines account for 12%, 10%, 9%, and 8% of the market respectively.