TikTok Shop, a rising threat to Shopee and Lazada in Southeast Asia
A merchant sells crystal ornaments via a live TikTok broadcast.
CFOTO | Future Publishing | Getty Images
TikTok Shop is a rising threat to major e-commerce players such as Shopee and Lazada in Southeast Asia.
It comes as its parent ByteDance pushes the short video app in markets outside the U.S. and India to create alternative revenue streams.
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TikTok Shop is the e-commerce marketplace of short video app TikTok, which is owned by Chinese tech giant ByteDance. The shopping app enables merchants, brands and creators to showcase and sell their goods to users.
In 2022, TikTok Shop expanded to six Southeast Asian countries — Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand.
“TikTok continues to grow rapidly in Southeast Asian countries. We estimate that TikTok’s 2023 [gross merchandise value] will reach 20%~ of Shopee, which we suggest prompted Shopee to defensively increase sales and marketing since April,” said Shawn Yang, analyst at Blue Lotus Research Institute, in a recent report on Sea Group, the owner of Shopee.
TikTok did not want to comment or reveal numbers.
TikTok Shop’s GMV, or total value of goods sold, skyrocketed more than four times to $4.4 billion in Southeast Asia in 2022, according to internal data obtained by tech media outlet The Information. TikTok Shop is reportedly aiming for a GMV target of $12 billion by 2023.
Impulse buying from watching content is an advantage TikTok has.
Sachin Mittal
Head of telecom & internet sector research, DBS Bank
To be clear, TikTok Shop’s current GMV is only a fraction of Shopee and Lazada’s.
Shopee netted $73.5 billion in GMV in 2022 while Lazada’s GMV was $21 billion for the year through September 2021, according to available public figures.
Rising threat
A TikTok spokesperson told CNBC that TikTok Shop “continues to grow rapidly” as both large and small users use the platform to reach new customers. TikTok is “focused on the continued development of TikTok Shop in Southeast Asia,” said the spokesperson.
As of May, the number of TikTok users in Southeast Asia alone is 135 million, according to market research company Insider Intelligence.
Indonesia has the second largest population of TikTok users after the U.S., according to Statista.
Indonesia is Southeast Asia’s most populous country, where 52% are young people and it has around 113 million TikTok users.
“Impulse buying from watching content is an advantage TikTok has,” Sachin Mittal, head of telecom & internet sector research at DBS Bank, told CNBC.
Sea Group is banking on its e-commerce arm Shopee to lift the group’s balance sheet as its gaming arm Garena continues to see revenue decline, given the lack of a strong games pipeline and the continued ban of its flagship game Free Fire in India due to national security threats.
Shopee is expanding its footprint in Malaysia and continues to build up its Brazil operations after exiting several European and Latin American markets.
TikTok is spending an incredible amount of money right now on incentives to onboard buyers and sellers, which may not be sustainable.
Jonathan Woo
Senior analyst, Phillip Securities Research
A survey conducted by online retail insights company Cube Asia revealed that consumers spending on TikTok Shop are reducing their spending on Shopee (-51%), Lazada (-45%), Offline (-38%) in Indonesia, Thailand, and Philippines.
Shopee and Lazada declined to comment on competition from TikTok Shop.
Data from web analytics firm Similarweb revealed that Shopee is currently the largest online marketplace in Southeast Asia, holding 30% to 50% traffic share across the region in the last three months, while Lazada holds the second spot with 10% to 30% traffic share.
Scrutiny on TikTok
TikTok Shop’s push comes as the app is being scrutinized in its largest market, the U.S., amid rising geopolitical tensions and tech rivalry between China and the U.S.
Last week, the U.S. state of Montana banned TikTok, which could spark other states to suit. TikTok disputed Montana’s allegations that the Chinese government “could access data about TikTok users, and that TikTok exposes minors to harmful online content” in a lawsuit filed Monday to try and reverse the ban.
TikTok CEO Shou Zi Chew’s testimony before Congress in March did not ease lawmakers’ worries about the app’s connections to China or the adequacy of Project Texas, its contingency plan to store U.S. data on American soil.
TikTok has also been banned in India since 2020, alongside other apps said to have Chinese origin. It is not accessible in China, though its Chinese version Douyin is widely used by over 750 million daily active users.
Not sustainable
But TikTok is burning cash to grow, a tested strategy to win market share.
“TikTok is spending an incredible amount of money right now on incentives to onboard buyers and sellers, which may not be sustainable,” said Jonathan Woo, senior analyst at Phillip Securities Research. Woo said he estimates the incentives to be between $600 million and $800 million a year, or 6% to 8% of a $10 billion GMV in 2023.
To incentivize sellers to join the platform, TikTok Shop waived commission fees when it launched in Singapore in August. Merchants were only required to pay a 1% payment fee.
Data from Apptopia, an app analytics company, showed that TikTok Shop Seller Center app has been attracting an increasing number of downloads in Indonesia over the past one year.
Meanwhile, Shopee charges more than 5% on commission, transaction and service fees.
A CNBC check revealed that four-ply toilet paper from Nomieo was selling on TikTok at 5.80 Singapore dollars for twenty-seven rolls. In comparison, the same goods are selling at around SG$16.80 on Shopee.
Woo noted that TikTok Shop is “still very young” and in the “burn-cash-to-grow phase which may not bode well in today’s market given higher cost of funding.”
TikTok Shop is also “just a platform with no end-to-end capabilities” unlike Shopee and Lazada which have been investing heavily in improving logistics for faster deliveries and returns, increasing overall user experience and trust for sellers and buyers, he said.
Overall, I think TikTok Shop has the potential to be as big as Shopee or Lazada, though this might take quite a number of years.
Jonathan Woo
Senior analyst, Phillip Securities Research
It also has a smaller user base at this point in time with a younger demographic which means less spending ability, said Woo.
“I don’t think there’s a big risk to Shopee from TikTok,” said Mittal. “Shopee can afford to lose some market share, but Lazada cannot.”
Lazada has been trying to catch up with Shopee ever since Shopee overtook the company to become Southeast Asia’s biggest e-commerce platform in 2020.
“Overall, I think TikTok Shop has the potential to be as big as Shopee or Lazada, though this might take quite a number of years,” said Woo, noting the gap between TikTok Shop and Shopee’s GMVs.
Omar Marques | Lightrocket | Getty Images
Ether ETFs have finally come to life this year after some started to fear they may be becoming zombie funds.
Collectively, the funds tracking the price of spot ether are on pace for their sixth consecutive week of inflows and eight positive week in the last nine, according to SoSoValue.
The second largest cryptocurrency has become more attractive to institutions in recent weeks largely due to recent regulatory momentum in the U.S. around stablecoins – many of which run on the Ethereum network – the successful IPO of Circle, the issuer of the second-largest stablecoin; and new leadership at the Ethereum Foundation.
“What we’re seeing is institutional recalibration,” said Ben Kurland, CEO at crypto charting and research platform DYOR. “After the initial ETH ETF approval fizzled without a price pop, smart money started quietly building positions. They’re betting not on price momentum but on positioning ahead of utility unlocks like staking access, options listings, and eventually inflows from retirement platforms.”
The first year of ether ETFs, which launched in July 2024, has been characterized by weak demand. While the funds have had spikes in inflows, they’ve trailed far behind bitcoin ETFs in both inflows and investor attention – amassing about $3.9 billion in net inflows since listing versus bitcoin ETFs’ $36 billion in their first year of trading.
“With increasing acceptance of crypto on Wall Street, especially now as a means for payments and remittances, investors are being drawn to ETH ETFs,” said Chris Rhine, head of liquid active strategies at Galaxy Digital.
Additionally, he added, the CME basis on ether – or the price difference between ether futures and the spot price – is higher than that of bitcoin, giving arbitrageurs an opportunity to profit by going long on ether ETFs while shorting futures (a common trading strategy) and contributing to the uptrend in ether ETF inflows.
Ether (ETH) 1 month
Despite the uptrend in inflows, the price of ether itself is negative for this month and flat over the past month.
For the year, it’s down 25% as it’s been suffering from an identity crisis fueled by uncertainty about Ethereum’s value proposition, weaker revenue since its last big technical upgrade and increasing competition from Solana. Market volatility driven by geopolitical uncertainty this year has not helped.
In March, Standard Chartered slashed its ether price target by more than half. However, the firm also said the coin could still see a turnaround this year.
Since last week’s big spike in inflows, they’ve “slowed but stayed net positive, suggesting conviction, not hype,” Kurland said. “The market looks like a heart monitor, but the buyers are treating it like a long-term infrastructure bet.”
A motorcycle is seen near a building of the Taiwan Semiconductor Manufacturing Company (TSMC), which is a Taiwanese multinational semiconductor contract manufacturing and design company, in Hsinchu, Taiwan, on April 16, 2025.
Daniel Ceng | Anadolu | Getty Images
Semiconductor stocks declined Friday following a report that the U.S. is weighing measures that would terminate waivers allowing some chipmakers to send American technology to China.
Commerce Department official Jeffrey Kessler told Samsung Electronics, SK Hynix and Taiwan Semiconductor this week that he wanted to cancel their waivers, which allow them to send U.S. chipmaking tech to their factories in China, the Wall Street Journal reported, citing people familiar with the matter.
The VanEck Semiconductor ETF declined about 1%. Nvidia, Qualcomm and Marvell Technology fell about 1%, while Taiwan Semiconductor slipped about 2%.
The latest reported move by the Commerce Department comes as the U.S. and China hold an unsteady truce over tariffs and trade, with chip controls a key sticking point.
The countries agreed to the framework of a second trade agreement in London days ago after relations soured following the initial tariff pause in May.
The U.S. issued several chip export changes after the May pause that rattled relations, with China calling the rules “discriminatory.”
U.S. chipmakers have been hit with curbs over the last few years, limiting the ability to sell advanced artificial intelligence chips to China due to national security concerns.
During its earnings report last month, Nvidia said the recent export restriction on its China-bound H20 chips hindered sales by about $8 billion.
Nvidia CEO Jensen Huang told investors on an earnings call that the $50 billion market in China for AI chips is “effectively closed to U.S. industry.” During a CNBC interview in May, he called getting blocked from China’s AI market a “tremendous loss.”
Read the full WSJ report here.
WATCH: U.S. prepares action targeting allies’ ability to ship American chip-making equipment to China
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