TikTok Shop is expected to acquire a 13.2% share of the Southeast Asian e-commerce industry this year, according to an unpublished report from venture capital company Momentum Works.
TikTok’s e-commerce unit is on track to hit its $15 billion gross merchandise value objective in 2023, a considerable increase from the previous year’s $4.4 billion, the report says.
TikTok Shop has expanded into 9 markets as of 2023, including all major markets in Southeast Asia, the United Kingdom, Saudi Arabia, and the United States.
TikTok Shop’s offline activity in Jakarta / Photo credit: TikTok
TikTok Shop’s market share in the area would be equal to that of Tokopedia, which is expected to be 13.9% this year, and Lazada, which is expected to be 17.7%.
The best-selling categories on TikTok Shop are beauty and personal care, which account for 84% of goods sold and 70% of its GMV. According to the study, beauty brands or sellers are putting together sets of goods to increase the average order value.
“Ultimately, change is the only constant. Whether TikTok Shop is a threat to incumbent platforms might not be a standalone question at all. The bigger narrative is that in e-commerce, where leading players seem to have a network effect and structural advantage, disruption can still happen and the incumbents should always remain focused and vigilant.” said Weihan Chen, Insights Lead of Momentum Works.
Shopee, which Momentum Works estimates will maintain a 46.5% market share this year, has stated its aim to concentrate on its live shopping function. This plan would put the Singapore-based e-commerce behemoth in even more direct confrontation with TikTok.
TikTok Shop had set a goal of $20 billion in sales by 2023, counting on strong development, particularly in Southeast Asia, according to Bloomberg, citing individuals familiar with the subject.
ByteDance’s e-commerce branch debuted in Southeast Asia around a year ago. As our prior data demonstrates, the platform is fast catching up to its competition.
It allegedly registered a $4.4 billion gross merchandise value in the area in 2022, a 363% rise over the previous year.
TikTok Shop enables TikTok app users to purchase and sell things from inside the TikTok app. Buyers had to previously click on affiliate links and complete the purchase on Shopee, Lazada, or other marketplaces.
