TikTok is wading into South-East Asia’s e-commerce wars
TikTok’S chief executive, Shou Zi Chew, faced angry lawmakers in Washington, who grilled him for five hours on topics ranging from misinformation to mental health. A threat of a ban in America, the short-video app’s largest market, looms large. Other Western governments are making similar noises.
TikTok, which is owned by a Chinese firm called ByteDance, has already been locked out of India, another big market, since 2020 on grounds of national security. Contrast that with the welcome Mr Chew received in June in Jakarta. He charmed a crowd in the Indonesian capital that included government officials with his plans for the company in South-East Asia, promising to invest “billions of dollars" in the region over the next few years.
As uncertainty looms over its prospects elsewhere in the world, TikTok, which in 2020 moved its global headquarters to Singapore, is eyeing South-East Asia’s nearly 700m consumers to bolster its fortunes. Reactions to his talk ranged from favourable to gushing—except among the region’s digital incumbents. That is because TikTok’s ambitions in South-East Asia go beyond silly dance videos.
In 2021 it launched TikTok Shop, which lets users buy products directly from the app. According to Momentum Works, a research firm in Singapore, last year products worth around $5bn were sold globally on its platform. This year the target is $20bn, with three-quarters of that coming from South-East Asian wallets.
This foray into e-commerce comes at a volatile time for the sector in the region. Shopee, which accounted for almost half the $100bn or so in goods sold online last year in South-East Asia (see chart 1), has reported two quarters of declining sales on its platform. The market value of its Singaporean
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