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.
“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.
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.
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.
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.
Apple is losing market share in China due to declining iPhone shipments, supply chain analyst Ming-Chi Kuo wrote in a report on Friday. The stock slid 2.4%.
“Apple has adopted a cautious stance when discussing 2025 iPhone production plans with key suppliers,” Kuo, an analyst at TF Securities, wrote in the post. He added that despite the expected launch of the new iPhone SE 4, shipments are expected to decline 6% year over year for the first half of 2025.
Kuo expects Apple’s market share to continue to slide, as two of the coming iPhones are so thin that they likely will only support eSIM, which the Chinese market currently does not promote.
“These two models could face shipping momentum challenges unless their design is modified,” he wrote.
Kuo wrote that in December, overall smartphone shipments in China were flat from a year earlier, but iPhone shipments dropped 10% to 12%.
There is also “no evidence” that Apple Intelligence, the company’s on-device artificial intelligence offering, is driving hardware upgrades or services revenue, according to Kuo. He wrote that the feature “has not boosted iPhone replacement demand,” according to a supply chain survey he conducted, and added that in his view, the feature’s appeal “has significantly declined compared to cloud-based AI services, which have advanced rapidly in subsequent months.”
Apple’s estimated iPhone shipments total about 220 million units for 2024 and between about 220 million and 225 million for this year, Kuo wrote. That is “below the market consensus of 240 million or more,” he wrote.
Apple did not immediately respond to CNBC’s request for comment.
Amazon said it is halting some of its diversity and inclusion initiatives, joining a growing list of major corporations that have made similar moves in the face of increasing public and legal scrutiny.
In a Dec. 16 internal note to staffers that was obtained by CNBC, Candi Castleberry, Amazon’s VP of inclusive experiences and technology, said the company was in the process of “winding down outdated programs and materials” as part of a broader review of hundreds of initiatives.
“Rather than have individual groups build programs, we are focusing on programs with proven outcomes — and we also aim to foster a more truly inclusive culture,” Castleberry wrote in the note, which was first reported by Bloomberg.
Castleberry’s memo doesn’t say which programs the company is dropping as a result of its review. The company typically releases annual data on the racial and gender makeup of its workforce, and it also operates Black, LGBTQ+, indigenous and veteran employee resource groups, among others.
In 2020, Amazon set a goal of doubling the number of Black employees in vice president and director roles. It announced the same goal in 2021 and also pledged to hire 30% more Black employees for product manager, engineer and other corporate roles.
Meta on Friday made a similar retreat from its diversity, equity and inclusion initiatives. The social media company said it’s ending its approach of considering qualified candidates from underrepresented groups for open roles and its equity and inclusion training programs. The decision drew backlash from Meta employees, including one staffer who wrote, “If you don’t stand by your principles when things get difficult, they aren’t values. They’re hobbies.”
Amazon, which is the nation’s second-largest private employer behind Walmart, also recently made changes to its “Our Positions” webpage, which lays out the company’s stance on a variety of policy issues. Previously, there were separate sections dedicated to “Equity for Black people,” “Diversity, equity and inclusion” and “LGBTQ+ rights,” according to records from the Internet Archive’s Wayback Machine.
The current webpage has streamlined those sections into a single paragraph. The section says that Amazon believes in creating a diverse and inclusive company and that inequitable treatment of anyone is unacceptable. The Information earlier reported the changes.
Amazon spokesperson Kelly Nantel told CNBC in a statement: “We update this page from time to time to ensure that it reflects updates we’ve made to various programs and positions.”
Read the full memo from Amazon’s Castleberry:
Team,
As we head toward the end of the year, I want to give another update on the work we’ve been doing around representation and inclusion.
As a large, global company that operates in different countries and industries, we serve hundreds of millions of customers from a range of backgrounds and globally diverse communities. To serve them effectively, we need millions of employees and partners that reflect our customers and communities. We strive to be representative of those customers and build a culture that’s inclusive for everyone.
In the last few years we took a new approach, reviewing hundreds of programs across the company, using science to evaluate their effectiveness, impact, and ROI — identifying the ones we believed should continue. Each one of these addresses a specific disparity, and is designed to end when that disparity is eliminated. In parallel, we worked to unify employee groups together under one umbrella, and build programs that are open to all. Rather than have individual groups build programs, we are focusing on programs with proven outcomes — and we also aim to foster a more truly inclusive culture. You can read more about this on our Together at Amazon page on A to Z.
This approach — where we move away from programs that were separate from our existing processes, and instead integrating our work into existing processes so they become durable — is the evolution to “built in” and “born inclusive,” instead of “bolted on.” As part of this evolution, we’ve been winding down outdated programs and materials, and we’re aiming to complete that by the end of 2024. We also know there will always be individuals or teams who continue to do well-intentioned things that don’t align with our company-wide approach, and we might not always see those right away. But we’ll keep at it.
We’ll continue to share ongoing updates, and appreciate your hard work in driving this progress. We believe this is important work, so we’ll keep investing in programs that help us reflect those audiences, help employees grow, thrive, and connect, and we remain dedicated to delivering inclusive experiences for customers, employees, and communities around the world.
New Tesla Model 3 vehicles on a truck at a logistics drop zone in Seattle, Washington, on Aug. 22, 2024.
M. Scott Brauer | Bloomberg | Getty Images
Tesla is voluntarily recalling about 239,000 of its electric vehicles in the U.S. to fix an issue that can cause its rearview cameras to fail, the company disclosed in filings posted Friday to the National Highway Traffic Safety Administration’s website.
“A rearview camera that does not display an image reduces the driver’s rear view, increasing the risk of a crash,” Tesla wrote in a letter to the regulator. The recall applies to Tesla’s 2024-2025 Model 3 and Model S sedans, and to its 2023-2025 Model X and Model Y SUVs.
The company also said in the acknowledgement letter that it has already “released an over-the-air (OTA) software update, free of charge” that can fix some of the vehicles’ camera issues.
In 2024, Tesla issued 16 recalls in the U.S. that applied to 5.14 million of its EVs, according to NHTSA data. The recall remedies included a mix of over-the-air software updates and parts replacements. More than 40% of last year’s recalls pertained to issues with the newest vehicle in the company’s lineup, the Cybertruck, an angular steel pickup that Tesla began delivering to customers in late 2023.
Regarding the latest recall, the company said it had received 887 warranty claims and dozens of field reports but told the NHTSA that it was not aware of any injurious, fatal or other collisions resulting from the rearview camera failures.
Other customers with vehicles that “experienced a circuit board failure or stress that may lead to a circuit board failure,” which cause the backup camera failures, can have their vehicles’ computers replaced by Tesla, free of charge, the company said.
Tesla did not immediately respond to CNBC’s request for comment.