TikTok Shop is making waves in the Southeast Asian e-commerce landscape, capturing a notable 39% share of gross merchandise value, a substantial increase from 29% in the first half of the previous year, according to data from Metric. In stark contrast, its competitor Shopee has seen a decline, with its market share slipping from 63% to 58%. When it comes to revenue growth, TikTok Shop outpaced Shopee dramatically, reporting a staggering 69% growth compared to Shopee’s more modest 16%.
Combined, TikTok Shop and Shopee command an impressive 97% of the market, leaving the remaining 3% to Lazada and Tiki, while other players remain too small to feature in Metric’s data. The analytics firm suggests that TikTok Shop’s ascent highlights a significant consumer trend towards platforms that marry entertainment with shopping, a seamless integration some are dubbing “shoppertainment.”
At the recent TikTok Shop Vietnam Summit, the platform celebrated the remarkable success of this entertaining shopping model. Metrics from 2024 show revenue growth surging by 2.3 times in affiliate marketing and 1.9 times in livestreaming and short videos. However, TikTok Shop is not just riding the wave of entertaining content; official brand stores are emerging as a crucial growth driver. Despite representing only 3.4% of total stores on Shopee and TikTok Shop, these brand malls accounted for an impressive 28.7% of total revenues, reflecting an eye-popping year-on-year growth of 63% and 107% respectively. It seems consumers are becoming increasingly discerning, gravitating towards trusted brands amid the prevalence of low-quality goods.
As we look ahead to the third quarter, forecasts from Metric indicate a projected gross merchandise value increase of 21.6% among the four major platforms, expected to reach VND122.8 trillion. Key sales events like the Mid-Autumn Festival and the back-to-school season are anticipated to fuel demand for education, gifting, and food products.
In a recent forum, Nguyen Lam Thanh of TikTok Vietnam emphasized a commitment to optimizing seller operations, enhancing user security, and bolstering community support initiatives within the industry. Meanwhile, rival platforms Shopee and Lazada are ramping up competition by offering free shipping, with Shopee announcing free shipping on all orders, except for bulky items, and Lazada launching similar offers for orders under 15kg from official brand stores.
What trends are fueling TikTok Shop’s growth in Southeast Asia?
The growth of TikTok Shop is largely attributed to the blending of entertainment and shopping—termed “shoppertainment”—which is increasingly resonating with consumers, alongside a notable rise in trust for official brand stores amidst a crowded market.
How is the competition responding to TikTok Shop’s success?
In response to TikTok Shop’s explosive growth, both Shopee and Lazada are implementing aggressive strategies, including offering free shipping on various orders to attract more customers.
What does the future look like for e-commerce platforms in the region?
The outlook for the coming months appears promising, with projections of a 21.6% increase in gross merchandise value across major platforms, driven by key shopping events and seasonal demand for various products.
