TikTok expands its reach in SE Asia

Short video-sharing app TikTok added Thailand, Vietnam and Malaysia into its shop destinations this month, expanding its e-commerce footprint in Southeast Asia, after early overseas trials in Indonesia and the UK.

TikTokShop, where users can buy things and make payments in one go, is a vital part in completing its business loop. Prior to that, online merchants could only use third-party links to sell their goods.

The move has attracted many Chinese cross-border firms to enter new markets in the three countries. Yang Kan's team is one of those following this trend. His successful marketing management in the UK on TikTok has helped his team gain overseas experience and access the resources of key opinion leaders and key opinion consumers across the world.

Yang told Chinese news portal Jiemian that first of all, TikTok e-commerce in Southeast Asia aims to attract traffic at low prices—engaging with consumers through affordable commodities. These goods come not only from platform merchants, but also from TikTok itself. Second, TikTok has provided subsidies for consumers, such as free shipping, he added.

Currently, TikTok is also willing to expose social media influencers to more audiences, Yang said.

Another cross-border company, Newme, chose to establish its own brand, recruiting and training its own influencers in China, according to Jiemian. The company previously targeted the UK market and now is planning to enter the Southeast Asia market as well.

One investor focusing on the cross-border business said to Jiemian that as Chinese brands go overseas, traditional marketing methods are no longer enough to connect brands with local consumers. Cross-border service providers for these brands can play an intermediary role. And Chinese service providers on Douyin have developed a whole methodology that can be replicated overseas.

Digital consumption has now become a way of life in Southeast Asia, data from e-Conomy SEA 2021 report showed, which was released by Google, Temase and Bain. According to the report, 40 million new internet users came online in 2021, bringing internet penetration in Southeast Asia to 75 percent. Eight in 10 of these users have purchased something online at least once.

The report forecast that the internet economy of Southeast Asia is poised to reach $360 billion in terms of gross merchandise volume by 2025, and closer to $1 trillion by 2030.