TikTok To Invest Billions In Southeast Asia For E-Commerce Push

Chinese-owned social media platform TikTok is refocusing its e-commerce efforts closer to home, amid ongoing tensions with Western governments and regulators.

Reuters reported that TikTok, owned by Beijing-based ByteDance, said on Thursday it would invest billions of dollars in Southeast Asia over the next few years.

The move comes as ByteDance doubles down on the region, amid intensifying global scrutiny over its data security practices.

Southeast Asia

Reuters reported that Southeast Asia is a region with a collective population of 630 million – half of them under the age of 30.

This makes it one of TikTok’s biggest markets in terms of user numbers, generating more than 325 million visitors to the app every month.

However monetising this large user base into a major e-commerce revenue stream will see TikTok encounter competition from larger rivals such as Sea’s Shopee, Alibaba’s Lazada and GoTo’s Tokopedia, Reuters reported.

“We’re going to invest billions of dollars in Indonesia and Southeast Asia over the next few years,” TikTok CEO Shou Zi Chew was quoted as saying at a forum it organised in Jakarta to highlight the social and economic impact of the app in the region.

TikTok did not provide a detailed breakdown of the spending plan, but said it would invest in training, advertising and supporting small vendors looking to join its e-commerce platform TikTok Shop.

Chew reportedly said content on its platform was becoming more diversified as it adds more users and expands beyond advertising into e-commerce, allowing consumers to purchase goods through links on the app during livestreaming.

Chew reportedly added that TikTok has 8,000 staff in Southeast Asia, and 2 million small vendors selling their wares on its platform in Indonesia, the region’s biggest economy.

E-commerce transactions across the region reached nearly $100 billion last year, with Indonesia accounting for $52 billion, Reuters reported, citing data from consultancy Momentum Works.

TikTok facilitated $4.4 billion of transactions across Southeast Asia last year, up from $600 million in 2021, but it still trailed far behind Shopee’s $48 billion of regional merchandise sales in 2022, Momentum Works reportedly said.

Growing scrutiny

ByteDance meanwhile continues attempts to reassure lawmakers in the United States and other nations, amid concerns at the national security implications of the use of TikTok – centred around how much data access Beijing has on TikTok users.

In May Montana became the first US state ban TikTok, with mobile operators, carriers, and app store owners soon to be at risk of daily fines for breaking the rules on TikTok usage in Montana.

TikTok is currently suing Montana to overturn the ban.

TikTok is already banned on government devices in most US states, as well as the federal government.

The White House has also added its backing to the bill from a bipartisan group of a dozen US senators that seeks to impose a nationwide ban in the US on TikTok.

TikTok is also banned on government devices in countries such as the UK, New Zealand, and Canada.

The European Commission and EU Council said in February they were banning TikTok from staff phones on security grounds.

TikTok has repeatedly denied that it has ever shared data with the Chinese government and has said the company would not do so if asked.