Short video app TikTok, owned by China’s ByteDance, said on Thursday it would invest billions of dollars in Southeast Asia over the next few years, as it doubles down on the region amid intensifying global scrutiny over its data security.
But the platform has yet to translate the large user base into a major e-commerce revenue source in the region as it faces fierce competition from bigger rivals of Sea’s Shopee, Alibaba’s Lazada and GoTo’s Tokopedia.
“We’re going to invest billions of dollars in Indonesia and Southeast Asia over the next few years,” TikTok CEO Shou Zi Chew said at a forum it organized 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 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.
TikTok has 8,000 employees in Southeast Asia and 2 million small vendors selling their wares on its platform in Indonesia, the region’s biggest economy, he added.
E-commerce transactions across the region reached nearly $100 billion last year, with Indonesia accounting for $52 billion, according to 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 said.