TEMPO.CO, Jakarta – Momentum Works, the company that works in technological strategic development, mentioned that TikTok Shop is projected to reach 13.2% of the ASEAN markets in 2023. The data was based on the study called “The TikTok Shop Playbook: How ecosystem stakeholders should respond to the e-commerce insurgent”.
Weihan Chen, the Insights Lead of Momentum Works explained that the issue is no longer about TikTok Shop which threatens other platforms, but instead how the e-commerce platforms could have network effects and structural dominance. “Disruption is still possible and the contenders have to remain focused and alert,” said Weihan Chen in a written statement quoted on Tuesday, August 22, 2023.
Several things were highlighted by Weihan Chen’s report, the first one being how TikTok Shop has shown impressive growth in Southeast Asia since 2021, on track to reach US$15 billion gross merchandise value (GMV) in 2023. “This will place TikTok Shop right beside Lazada and Tokopedia,” wrote the report.
Secondly, TikTok Shop markets expanded in 2023, branching out to the main markets in Southeast Asia, the UK, Saudi Arabia, and the US. However, the expansion was not without operational issues.
The third thing is concerning the most in-demand category in TikTok Shop, namely the beauty and self-care products. These products covered 70% of TikTok Shop’s GMV.
Fourth, Weihan Chen reported that TikTok Shop has a natural flow which reduces the acquisition and retention budget. TikTok is also pushed by recommendation and content which facilitate its cooperation with brand creators.
The fifth thing Weihan Chen highlighted is that TikTok is a threat to the global e-commerce market. “Including Shopee and Lazada in Southeast Asia and Amazon in the US and the Middle East,” the report said.
The last thing highlighted by the report was that a dynamic and competitive landscape could develop rapidly. According to the report, the US could potentially be a bigger market than all of Southeast Asia combined if TikTok plays its cards right.
Source: Tempo News