On Thursday, TikTok, the short-video app owned by China’s ByteDance, announced plans to make big investments in Southeast Asia in the approaching years.
Southeast Asia, with a complete population of 630 million, half of that are under 30, is a vital marketplace for TikTok. The app is visited by over 325 million lively users within the region every month.
In an effort to repeatedly expand TikTok’s reach, Chew Shou Zi, the corporate’s CEO, revealed that the app has successfully provided a platform to greater than 15 million small businesses in Southeast Asia, including five million in Indonesia.
In addition, over 3,400 TikTok users and 25 non-profit organizations participated within the study conducted by the American research company Kadence International between August and September 2022. This comprehensive study used a mixture of online surveys and offline interviews to collect insights.
The results revealed some interesting findings. Of the organizations surveyed, 79 percent said TikTok played a crucial role in helping them transition from offline to internet marketing channels. Additionally, a formidable 74 percent credited the app with increasing sales volume.
While Chew Shou Zi didn’t reveal the precise amount or timing of the investment, he did reveal that a part of the investment will include a US$12.2 million (S$16.4 million) fund that will probably be used to support over 120,000 SMEs, entrepreneurs and young people over the subsequent three years.
TikTok also plans to speculate in training, promotion and support for small sellers who want to affix the TikTok Shop e-commerce platform. These steps will position TikTok as a robust partner for small businesses, enabling them to leverage the platform’s enormous potential.
At the identical time, TikTok also revealed interesting conclusions in its latest report. The report found that greater than six in 10 app revenue creators in nine Southeast Asian countries earn greater than their country’s minimum wage.
Nearly nine out of ten creators in Laos earned greater than their country’s minimum wage. Meanwhile, the Philippines was the bottom, with only 4 out of ten creators earning greater than the minimum wage. In Indonesia, greater than six out of ten creators earn above the minimum wage.
While Southeast Asia has develop into one in all TikTok’s largest markets by way of users, the platform still faces challenges in turning this user base into a big source of e-commerce revenue. Amid stiff competition from giants like Tokopedia, Lazada and Alibaba-owned Shopee, TikTok has yet to ascertain dominance as a significant player within the industry.
An interesting report by Singaporean enterprise capital firm Momentum Works revealed that Shopee will probably be the dominant e-commerce player in Southeast Asia by 2022. Shopee is the market leader, with almost half of total e-commerce merchandise value of $47.9 billion. This is followed by Lazada value $20.1 billion and Tokopedia value $18.4 billion.
Meanwhile, TikTok Shop has only facilitated $4.4 billion value of transactions. This number actually represents a rise of $600 in comparison with 2021. However, it still lags far behind Shopee.
TikTok’s investment move comes amid increased scrutiny and regulation amid concerns that Beijing could also be using the app to gather user data or advance its own interests.
While TikTok has consistently denied sharing data with the Chinese government and says it won’t achieve this if asked, several countries, including the UK and New Zealand, have banned the app on government-owned devices. Driven by broader geopolitical aspects.
While the app has not faced widespread bans in Southeast Asia, it has been scrutinized for its content. Indonesia and Vietnam are two countries which have announced such policies. In 2018, Indonesia briefly banned TikTok for posts deemed to contain “pornography, inappropriate content and blasphemy”. Meanwhile, Vietnam said content on the platform threatened the country’s youth and traditions, so the federal government announced an investigation into TikTok within the country.
