TikTok Shop surpasses Tokopedia to become the second-largest e-commerce platform in Southeast Asia in 2023, according to a Momentum Works report.
Shopee still maintained its dominant position with a GMV of US$55.1 billion, securing a 48 per cent market share.
TikTok Shop, which quadrupled its annual GMV to US$16.3 billion in 2023, is now at the same scale as Lazada and Tokopedia. TikTok Shop’s merger with Tokopedia pits it against Shopee at a similar scale.
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There is more to this report; while Shopee, Lazada, and Tokopedia all reduced their workforce between 2022 and 2024, TikTok Shop has expanded its workforce to over 8,000 employees since December 2021. It means it optimises its investments for healthier growth in the region.
The findings were part of Momentum Works’s ‘The Ecommerce in Southeast Asia 2024’ report. which provides comprehensive insights into the region’s six key e-commerce markets, analysing the competitive landscape and ecosystem players, including logistics.
The report further revealed that Southeast Asia’s e-commerce market continues its impressive growth, achieving a total Gross Merchandise Value (GMV) of US$114.6 billion in 2023, a 15 per cent increase from the previous year, reveals a study.
Indonesia remains the largest e-commerce market in the region, contributing 46.9 per cent to the region’s GMV. This is a lower share compared to 54 per cent in 2022. However, the archipelago’s e-commerce growth rate of 3.7 per cent is the slowest in the region.
Vietnam and Thailand are the fastest-growing markets, with GMV increases of 52.9 per cent and 34.1 per cent year-on-year, respectively. Vietnam has now surpassed the Philippines to become the third-largest e-commerce market in the region.
The other three key markets, the Philippines, Malaysia and Singapore, all registered double-digit or very close to double-digit growth.
Also Read: The evolution and regulation of social commerce in Indonesia: The TikTok Shop ban
Temu, Pinduoduo’s global arm that shook up the e-commerce landscape in the US, has also entered Southeast Asia in 2023. While it is finding a way to enter Indonesia, its current cross-border model will not be welcome in the country. However, the platform might turn more attention to the region after ROl declines in other markets such as North America and Europe.
The report also highlighted four key trends shaping Southeast Asia’s e-commerce landscape:
Live commerce: Leading Key Opinion Leaders (KOLs) in Vietnam, Thailand, and Indonesia are achieving multi-million dollar sales in single live sessions.
Generative AI: E-commerce platforms in the region are beginning to adopt generative AI applications, enhancing user experience and operational efficiency.
E-commerce enablers: Faced with market constraints and reduced brand market shares on platforms, many e-commerce enablers are diversifying their business models.
E-commerce logistics: Third-party logistics providers are experiencing increased pressure as platforms begin to in-source parcel delivery services.
According to Jianggan Li, Founder and CEO of Momentum Works, “The competitive landscape of e-commerce in Southeast Asia remains dynamic and constantly transforming. With markets like Vietnam and Thailand showing remarkable growth and platforms like TikTok Shop rapidly expanding, it’s clear that innovation and adaptation are key to success in this region. The adoption of generative AI and the evolution of live ecommerce are reshaping the industry, and we are excited to see these trends drive continued growth and opportunities for businesses across Southeast Asia.”
Also Read: GoTo completes merger with TikTok Shop Indonesia
Headquartered in Singapore, Momentum Works builds, scales, and manages tech ventures across emerging markets. The company leverages its extensive knowledge, community, and experience to inform, connect, and enable the tech and new economy ecosystem. Key business areas include ventures, insights, immersions, and advisory services.
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