TikTok to speculate billions of {dollars} in Southeast Asia to spice up e-commerce enterprise

TikTok to speculate billions of {dollars} in Southeast Asia to spice up e-commerce enterprise
  • Plan comes amid international scrutiny over information safety
  • TikTok has 8,000 employees in Southeast Asia
  • Faces competitors from e-commerce rivals like Shopee and Lazada

JAKARTA, June 15 (Reuters) – Quick video app TikTok, owned by China’s ByteDance, mentioned on Thursday it will make investments billions of {dollars} in Southeast Asia over the subsequent few years, because it doubles down on the area amid intensifying international scrutiny over its information safety.

Southeast Asia, a area with a collective inhabitants of 630 million – half of them below 30 – is one in every of TikTok’s largest markets when it comes to person numbers, producing greater than 325 million guests to the app each month.

However the platform has but to translate the massive person base into a serious e-commerce income supply within the area because it faces fierce competitors from greater rivals of Sea’s (SE.N) Shopee, Alibaba’s (9988.HK) Lazada and GoTo’s (GOTO.JK) Tokopedia.

“We’ll make investments billions of {dollars} in Indonesia and Southeast Asia over the subsequent few years,” TikTok CEO Shou Zi Chew mentioned at a discussion board it organised in Jakarta to focus on the social and financial influence of the app within the area.

TikTok didn’t present an in depth breakdown of the spending plan, however mentioned it will put money into coaching, promoting and supporting small distributors seeking to be part of its e-commerce platform TikTok Store.

Chew mentioned content material on its platform was changing into extra diversified because it provides extra customers and expands past promoting into e-commerce, permitting customers to buy items by way of hyperlinks on the app throughout livestreaming.

TikTok has 8,000 workers in Southeast Asia, and a pair of million small distributors promoting their wares on its platform in Indonesia, the area’s largest financial system, he added.

E-commerce transactions throughout the area reached practically $100 billion final yr, with Indonesia accounting for $52 billion, based on information from consultancy Momentum Works.

TikTok facilitated $4.4 billion of transactions throughout Southeast Asia final yr, up from $600 million in 2021, but it surely nonetheless trailed far behind Shopee’s $48 billion of regional merchandise gross sales in 2022, Momentum Works mentioned.

TikTok’s funding plan comes because the Chinese language-owned firm faces scrutiny from some governments and regulators due to considerations that Beijing may use the app to reap person information or advance its pursuits.

Nations together with Britain and New Zealand have banned the app on authorities telephones, strikes TikTok mentioned it believed had been based mostly on “elementary misconceptions” and pushed by wider geopolitics.

TikTok has repeatedly denied that it has ever shared information with the Chinese language authorities and has mentioned the corporate wouldn’t accomplish that if requested.

The app has not confronted main bans on authorities gadgets in Southeast Asia, but it surely has been below scrutiny over its content material.

Indonesia offered one in every of its first main international coverage challenges in 2018, after authorities briefly banned TikTok for posts they mentioned contained “pornography, inappropriate content material and blasphemy.”

In Vietnam, regulators mentioned it will probe TikTok’s operations within the nation as a result of “poisonous” content material on the platform poses a risk to its “youth, tradition and custom.”

Reporting by Stanley Widanto in Jakarta; Extra reporting by Anne Marie Roantree in Hong Kong and Fanny Potkin in Singapore; Writing by Miyoung Kim; Modifying by Christopher Cushing and Jamie Freed

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Stanley Widianto

Thomson Reuters

Stanley stories on breaking information in Indonesia. Earlier than becoming a member of Reuters, he was a contract reporter who wrote in regards to the arts and politics within the Southeast Asian nation. In his spare-time, he likes listening to ambient music or logging on to scour for the trendiest memes.