TikTok breakthrough in the race to capture e-commerce market share
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- Digital
- 17:00 18/07/2024
DNHN - An important factor contributing to TikTok's success is the livestream feature. This feature has attracted a large number of users and significantly contributed to TikTok's sales.
![Experts believe that TikTok's success in ASEAN is largely due to its e-commerce development strategy by leveraging the livestream feature Experts believe that TikTok's success in ASEAN is largely due to its e-commerce development strategy by leveraging the livestream feature](https://media.doanhnghiephoinhap.vn/uploads/2024/07/18/tiktok-breakthrough-1721296683.jpg)
A recently published annual study states that TikTok, the short video app from Chinese technology group ByteDance, is becoming one of the largest e-commerce platforms in Southeast Asia, a market long dominated by ASEAN platforms like Shopee and Alibaba's Lazada.
According to a report by Singapore-based consultancy Momentum Works, TikTok Shop's gross merchandise volume (GMV) nearly quadrupled, from $4.4 billion in 2022 to $16.3 billion in 2023, the fastest growth rate among competitors in the region.
The report states that combined with Indonesia's Tokopedia, in which TikTok acquired a majority stake last year, TikTok Shop has surpassed Lazada to become the second-largest e-commerce platform in the ASEAN region, with an estimated market share of 28.4% as of last year.
TikTok is not only focusing on developing an online shopping platform but also heavily investing in human resources. Since its launch in 2021, TikTok has increased recruitment in Southeast Asia. By 2023, TikTok's number of employees has quadrupled, reaching over 8,000 people, equal to Lazada.
An important factor contributing to TikTok's success is the livestream feature. This is where influencers and sellers showcase beauty, fashion, and household products, allowing users to purchase in real-time. This feature has attracted a large number of users and significantly contributed to TikTok's sales.
In Vietnam, TikTok has also surpassed Lazada to become the number 2 online commerce platform, just behind Shopee. According to analytics firm Metric, sellers in the country earned about $1.3 billion in the fourth quarter of 2023 and the first quarter of 2024.
According to DataReportal, Vietnamese sellers often use Amazon and Alibaba for exporting but are increasingly turning to social commerce platforms for shopping. At the beginning of 2024, TikTok reached 67 million users in Vietnam, a rapid growth compared to 50 million a year earlier. This number is equivalent to Facebook's 73 million users and YouTube's 63 million users.
Reports also indicate that the scale of ASEAN e-commerce reached $114.6 billion in 2023, up 15% from the previous year. Shopee still leads with a 48% market share, followed by Lazada with 16.4%, TikTok Shop and Tokopedia each holding 14.2%.
Experts also believe that TikTok's success in ASEAN is largely due to its e-commerce development strategy by leveraging the livestream feature, where influencers and sellers showcase products from beauty and fashion to household items, allowing users to purchase in real-time. This method is very accessible to customers in the region.
For its part, Shopee, which is cutting costs to turn a profit, has also started efforts to protect its market share against increasingly fierce competition. In August 2024, Shopee's parent company Sea announced that it would increase investment in livestream capabilities and logistics.
Despite achieving many successes, TikTok also faces many challenges. In Indonesia, TikTok Shop was forced to suspend services after the government banned online transactions on social media.
Just a few months later, TikTok announced that it would invest more than $1.5 billion and acquire a 75% stake in Tokopedia, the leading e-commerce company of Indonesia's GoTo technology group, to restart online shopping operations in the country.
TikTok and Tokopedia have developed to hold 39% market share in Indonesia, just behind Shopee with 40%.
Thu Hang
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