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TikTok’s Investment Unleashes Potential for Local SMEs in Southeast Asia

    TikTok Chief Executive Officer Shou Zi Chew delivers his speech during the launch of TikTok Socio-Economic Impact Report 2023 event at The Ritz Carlton, Pacific Place in Jakarta, Indonesia, June 15, 2023. (Reuters/Ajeng Dinar Ulfiana)
    TikTok Chief Executive Officer Shou Zi Chew delivers his speech during the launch of TikTok Socio-Economic Impact Report 2023 event at The Ritz Carlton, Pacific Place in Jakarta, Indonesia, June 15, 2023. (Reuters/Ajeng Dinar Ulfiana)

    Fueling Growth, Fostering Entrepreneurship

    With its sights set on Southeast Asia, TikTok’s investment strategy goes beyond financial objectives. CEO Shou Zi Chew envisions a future where local businesses thrive and economic prosperity becomes a reality. “We’re going to invest billions of dollars in Indonesia and Southeast Asia over the next few years,” said Chew during the TikTok SEA Impact Forum 2023 in Jakarta, emphasizing the company’s commitment to supporting the region’s entrepreneurial ecosystem.

    The Southeast Asia market consistently serves as a crucial hub for both emerging and established e-commerce companies to penetrate and expand their operations. According to a report by Momentum Works, a venture outfit headquartered in Singapore, Southeast Asia, particularly Indonesia, is at the forefront of the region’s e-commerce revolution. It accounts for 52% of the total Gross Merchandise Value (GMV), which represents the value of goods sold through e-commerce platforms in the region.

    Unleashing the Potential: Impact of TikTok’s Investment

    The impact of TikTok’s investment in Southeast Asia is already palpable. From the bustling streets of Jakarta to the serene towns of Vietnam, the app has become a catalyst for many small businesses. TikTok plans to invest in various areas, including training, advertising, and supporting small vendors to join its e-commerce platform, TikTok Shop. This expansion allows small vendors to reach a broader audience beyond their usual targets.

    One success story is that of Ela, a local curtain seller in Lampung, South Sumatera, Indonesia. By utilizing TikTok as a marketing channel and participating in the TikTok Shopping program during the holy month of Ramadan last year, Ela experienced a remarkable 142% increase in her store’s GMV. She noted that livestream sales sessions during the TikTok Shopping Ramadan Sale enabled her to showcase the quality of her curtains, interact directly with customers, answer questions, and provide tips on selecting suitable curtains for their homes.

    TikTok’s investment in Southeast Asia is not a random pick and choose. Statistics reveal a significant rise in transactions facilitated by the platform, surging from $600 million in 2021 to an impressive $4.4 billion last year across the region. This exponential growth empowers many aspiring entrepreneurs, giving them the opportunity to turn their passions into thriving businesses.Browse our partner-sponsored Glasses, with a variety of options to suit every taste and budget, available to buy online

    Photo by PhotoMIX Company in Pexels
    Photo by PhotoMIX Company in Pexels

    Challenges and Triumphs: Navigating the Path to Success

    TikTok’s journey in Southeast Asia has not been without its challenges. The platform faces fierce competition from established e-commerce giants like Shopee, Lazada, and Tokopedia. According to the report from Momentum Works, Shopee dominates 48.1% of the region’s total GMV, while Lazada and Tokopedia trail behind with 20.2% and 18.4%, respectively. In contrast, TikTok Shop currently holds a smaller share of the GMV at 4.4%. However, this opens up vast opportunities for TikTok to compete and carve its place in the market.

    In addition to the intense battle for customers, concerns over data security surrounding TikTok have emerged, driven by fears that user data could be harvested or misused. Despite these concerns, the Indonesian government welcomes TikTok potential investment with open arms. Zulkifli Hasan, Minister of Trade of the Republic of Indonesia, stated, “Not only being an entertainment platform, TikTok also has a major influence on the Indonesian MSME ecosystem. We are pleased that digital developments such as TikTok make it easier for buyers to meet producers.”


    TikTok’s ambitious investment in Southeast Asia holds the potential to reshape the e-commerce landscape by providing opportunities for local SMEs to thrive and succeed in the digital age. Through its empowerment of these businesses, TikTok is challenging traditional notions of business success and stimulating economic growth. Despite being overlooked by some governments, it is an undeniable fact that TikTok has supported numerous small businesses in generating significant transactions that benefit a wide range of people.

    Article by: Al Bahits Annef

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