TikTok, the social media app that’s taken the world by storm, has announced it’ll invest billions in Southeast Asia over the next three to five years. The move is aimed at developing the app’s e-commerce branch.
The path from social media platform to online vendor is short and well-travelled. Facebook, Instagram, and Weibo (popular in China) all allow users to shop for obscure Nicholas Cage memorabilia without leaving their app.
It’s a lucrative strategy, too: last year, TikTok sold $2.5B of merchandise in Indonesia alone and has plans to get its global e-commerce sales up to $20B by the end of this year. And it makes sense to focus on Southeast Asia:
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- 👶 It’s young – half the region’s population is under 30
- 📱 Tech-savvy – 80% of folks there are already online, and
- 💸 Getting richer – median salaries are set to grow 6% this year.
Intrigue’s take: So there are solid pull factors in Southeast Asia. But TikTok is responding to push factors, too. In its largest market (the US), many merchants are reluctant to put effort into TikTok due to concerns about the app’s future: Montana has already banned it on national security grounds. Others may follow.
And it’s best not to put eggs in baskets threatening to go vegan.
Also worth noting:
- The global e-commerce market reached $17T in 2022 and could hit $70T by 2028.
- TikTok CEO Shou Zi Chew said Indonesia is the app’s second largest market with 125 million users, out of 325 million users in Southeast Asia.
- The company’s CEO was recently called to testify before the US Congress on his platform’s links to China’s government.