TikTok To Pump Billions Of Dollars Into Southeast Asia To Strengthen E-commerce Presence

TikTok, the short video app owned by ByteDance of China, announced on Thursday that it plans to invest billions of dollars in Southeast Asia in the coming years. This move is aimed at strengthening its presence in the region, which is facing increased global scrutiny over data security concerns.

Southeast Asia, a region with a combined population of 630 million — half of them under the age of 30 — is one of TikTok’s biggest markets by user count, bringing more than 325 million visitors to the app each month.

However, the platform has yet to turn a large user base into a major source of e-commerce revenue in the region as it faces stiff competition from larger rivals Sea’s Shopee, Alibaba Lazada and GoTo’s Tokopedia.

“We plan 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 held in Jakarta to highlight the app’s social and economic impact 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 sellers who want to join its e-commerce platform TikTok Shop.

Chew said its platform’s content will diversify as it adds more users and expands beyond advertising into e-commerce, allowing consumers to buy products through links in the app while streaming.

TikTok has 8,000 employees in Southeast Asia and 2 million small sellers sell their products on its platform in Indonesia, the region’s largest economy, he added.

E-commerce transactions in the region reached nearly $100 billion last year, with Indonesia accounting for $52 billion, according to data from consulting firm Momentum Works.

TikTok facilitated $4.4 billion in transactions in Southeast Asia last year, up from $600 million in 2021, but still fell well short of Shopee’s $48 billion in regional merchandise sales in 2022, Momentum Works said.

TikTok’s investment plan comes as the Chinese-owned company faces scrutiny from some governments and regulators over concerns that Beijing could use the app to collect user data or promote interests.

Countries including the UK and New Zealand have banned the app on government phones, with TikTok saying the moves were based on “fundamental misunderstandings” and were based on wider geopolitics.

TikTok has repeatedly denied ever sharing data with the Chinese government and has said the company would not do so if asked.

The app has not faced major bans on government devices in Southeast Asia, but its content has been scrutinized.

Indonesia mounted one of its first major global political challenges in 2018 after authorities briefly banned TikTok over posts they said contained “pornography, inappropriate content and blasphemy.”

In Vietnam, regulators said they are investigating TikTok’s operations in the country because the platform’s “toxic” content threatens its “youth, culture and traditions.”