TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
The changing face of e-commerce
Changing social media engagement and rising marketplace fees are fueling a new concept of online shopping: social commerce.
Change Size
Christine Febriyanti (center), owner of a TikTok sales channel called Monomolly, and her employees offer merchandise through a TikTok live stream in Jakarta on April 4, 2023. (AFP/Bay Ismoyo)
T
he rapid growth of social commerce through platforms like TikTok and WhatsApp is redefining e-commerce in Southeast Asia and threatening the market position of conventional online marketplaces like Shopee and Lazada.
With a population of 630 million people, half of them under 30, Southeast Asia is one of TikTok's largest markets.
Reuters reported that the region saw more than 325 million visitors use the ByteDance-owned app each month, with 125 million from Indonesia alone.
Indonesia also accounts for the lion’s share of e-commerce sales in the region, contributing $52 billion to Southeast Asia’s total $100 billion last year, according to a study published by Momentum Works last month.
The study finds that TikTok has established itself as a significant e-commerce force in the region, where it achieved a gross merchandise value (GMV) of US$4.4 billion last year.
Lazada, a more conventional online marketplace, meanwhile, has seen its GMV decline from $21 billion in 2021 to $20.1 billion in 2022 due to a reduced average order value (AOV), according to the Momentum Works data.
While Lazada’s GMV still dwarfs TikTok’s, momentum is in the latter’s favor, because TikTok’s $4.4 billion GMV marks massive growth over just $0.6 billion achieved in 2021, and the Beijing-based social media firm is gunning for $15 billion this year.
