TikTok Shop Watch #5: Southeast Asia
What is driving and limiting Bytedance's e-commerce growth in these markets?
Contents
Things that caught our attention
Introduction
Last week, we continued our periodical reports on TikTok Shop with an exploration of its progress outside Asia. This week, we will take a closer look at its development in Southeast Asia, currently TikTok Shop’s most important region.
Even if you are not active in the Southeast Asian region, we think it’s worth your time to watch TikTok Shop’s developments there. Just as Douyin serves as a blueprint for what Bytedance aims to achieve in Southeast Asia, so too are TikTok’s experiences in Southeast Asia a blueprint for a rollout in Europe and the Americas.
If you are not familiar with TikTok’s initiatives in Southeast Asia, we suggest reading our December 2023 and January 2025 reports first.
In addition to utilising source material from our partner, Six Degrees Intelligence, we have also collaborated with Momentum Works on this report. We have incorporated some of the relevant slides from their highly recommended E-commerce in Southeast Asia 3.0 report. This report contains a wealth of information on the Southeast Asian e-commerce market, and we recommend obtaining a copy if you want to delve deeper than just TikTok Shop.
The free section of the report below contains an overview of the current status of TikTok Shop in Southeast Asia. Paid subscribers get full access to this report and will learn …
What drives TikTok Shop’s growth in the Southeast Asian market.
TikTok’s strategy to cope with logistical challenges in Southeast Asia.
How TikTok Shop plans to improve live commerce penetration in the region.
TikTok’s goals and expectations for profitability in 2025 and beyond.
And much more …
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Ed Sander, Tech Research Analyst
TikTok Shop in Southeast Asia
In the Southeast Asian countries where TikTok Shop is active, Momentum Works reported the following GMV growth figures among leading e-commerce platforms in 2024.
Source: E-commerce in Southeast Asia 3.0 report by Momentum Works
While Indonesia remains the largest e-commerce market, strong growth in other countries has led to a decrease in its share of Southeast Asian e-commerce, from 52% in 2022 to 44% in 2024.
TikTok has hundreds of millions of users in Southeast Asia. In contrast, the number of daily active TikTok users in the United States fluctuates between 100 million and 150 million, while the number of daily active users in the United Kingdom is between 35 million and 38 million.
TikTok Shop's business development in Southeast Asia can be described as rapid and extensive. Currently, its business covers six countries in Southeast Asia, including Indonesia, Thailand, Vietnam, the Philippines, Malaysia, and Singapore. TikTok Shop first entered the Southeast Asian market in December 2020, choosing Indonesia as its first country of operation. Subsequently, between 2021 and 2022, it gradually expanded its business to the five other Southeast Asian countries.
TikTokShop has achieved good results in the Southeast Asian market, with a total GMV of $32 billion and net sales (after deducting returns and cancellations) of $24.4 billion in 2024. The region is experiencing rapid growth, but the performance of each country varies. Vietnam, Thailand and Indonesia (including Tokopedia, see below) performed relatively well, with Vietnam performing exceptionally well. However, the Philippines, Singapore, and Malaysia fell short of expectations.
In Q1 2025, TikTok Shop Thailand's GMV more than tripled year-over-year, with Indonesia and Vietnam also surging over 150%. Globally, the platform reached $10 billion in GMV—a 42% increase—led by Thailand's $2.5–$3 billion GMV and a 217% quarterly growth rate, surpassing the U.S. and Indonesia. [2]
By June 2025, the region's total daily sales were expected to reach approximately $140 million. Specifically, Thailand is $38 million, Vietnam is $35 million, Indonesia (excluding the part merged with Tokopedia) is $29 million, the Philippines is $19 million, Malaysia is $17 million, and Singapore is between $1.15 million and $1.2 million.
In anticipation of potential regulatory headwinds similar to those in Vietnam and Indonesia, TikTok Shop has announced a $8.8 billion investment over five years to enhance Thailand’s digital infrastructure, including data centres and content hubs. Thailand is Southeast Asia's fastest-growing e-commerce market, with TikTok Shop reaching $5.9 billion in sales last year and more than 3 million Thai sellers on the platform. [3]
TikTok Shop has relaxed its entry requirements across Southeast Asia, eliminating e-commerce experience requirements for merchants. Now, any merchant with a valid business license from mainland China or Hong Kong is eligible to join. At the same time, individual sellers only need a permit, along with some operational history, to quickly open a store. [2]
However, since 2025, many cross-border and local sellers from China have reported that operating on TikTok Shop in Southeast Asia is challenging. Southeast Asian e-commerce has already been operating with thin profits, and the platform has further increased its fees. The platform's comprehensive rate has risen from the low-price subsidies of the past to a level similar to that of Shopee. [1]
Indonesia
Currently, the Indonesian market accounts for about 35% to 40% of TikTok Shop’s total revenue. According to third-party tracking data consulted by Momentum Works, even though TikTok’s subsidy level has been reduced, the monthly GMV of TikTok Shop in Indonesia has exceeded the level before the temporary ban in October 2023. [1]
In Indonesia, the demand of consumers in second- and third-tier cities on short video platforms has been further stimulated. These consumers were previously less active on e-commerce platforms. Through precise recommendations and live broadcast interactions, TikTok Shop provides merchants with new opportunities to reach these consumers, thereby gradually increasing market penetration. [1]
In the Indonesian market, although Shopee's growth rate is not as fast as TikTok Shop’s, its absolute value is still higher. Meanwhile, Lazada's growth rate and absolute value are lower than those of TTS. These data show that despite some challenges faced by TTS, it still maintains a strong growth momentum in the Southeast Asian market.
The Indonesian market is undergoing significant changes. The market share of international goods is declining, while the proportion of locally produced goods is increasing. This change is partly due to the impact of Chinese state-owned enterprises on the local market, which has led the Indonesian government to take measures to protect local merchants, resulting in the removal of certain products. Merchants who perform well in the local market are mostly from mainland China, and these merchants usually expand in overseas markets at the corporate level.
Challenges in Indonesia continue. In late June, the Indonesian government implemented a rule requiring all e-commerce platforms to directly collect and transfer taxes from millions of Indonesian sellers to the government, at a rate of 0.5%. [4]
Status of the Tokopedia Merger
TikTok and Tokopedia established a joint venture in Indonesia. The $1.5 billion merger enabled ByteDance to relaunch TikTok Shop in Indonesia while navigating local regulations, keeping the country a key battleground against rivals Shopee and Lazada.
As a result of the merger, TikTok Shop is facing some challenges in data statistics. The merger resulted in some traffic being diverted to Tokopedia, and the TikTok Shop system did not record some GMV. This made it impossible to fully monitor the actual situation after the merger. For example, the average daily sales data mentioned above does not include Tokopedia's data for the Indonesian market.
This situation has an impact on TikTok's performance statistics in the Indonesian market, where TikTok Shop did not meet its targets. However, if the data of the Indonesian joint venture and Tokopedia is taken into account, Indonesia has actually achieved its intended goals.
TikTok Shop cut several hundred jobs in Indonesia following its merger with Tokopedia, trimming teams across logistics, operations, marketing, and warehousing. Further cuts may follow in July, reducing the combined workforce from about 5,000 to roughly 2,500. Despite the downsizing, TikTok says it ‘remains committed to investing in Indonesia and Tokopedia for sustainable growth’. [5]
Tokopedia and TikTok Shop have officially launched an integrated Seller Centre, giving Indonesian sellers a single dashboard to manage both platforms. The integration streamlines inventory sync, reduces errors, and expands sellers' access to TikTok's audience alongside Tokopedia's local market. Early users report faster deliveries and sales jumps, with some seeing GMV grow by over 50% within weeks. [6]
However, not all merchants are this happy. Rest of World recently published an article [4] revealing further struggles caused by the merger.
ByteDance is reportedly not investing in Tokopedia, and its sales volume is decreasing.
Tokopedia merchants have been asked to create videos and livestreams, while they previously only had to list products on Tokopedia. They also report revenue drops and algorithmic sidelining after integration with TikTok.
Merchants report being pressured to integrate their Tokopedia dashboards with TikTok’s, despite this being marketed as a voluntary option. Those who made the switch have lower site visits, higher fees and ad costs and less control over delivery as they are unable to choose reliable couriers or opt out of free shipping and cash-on-delivery options.
Thousands of merchants have moved to a little-known platform called … Toco.
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