TikTok plans to pump billions into Indonesia and Southeast Asia over the next few years, doubling its exposure to the region as data security comes under increasing scrutiny around the world.
TikTok announced on Thursday that the company will invest billions of dollars in Southeast Asia over the next few years, gaining a foothold in the region amid increasing scrutiny of the company’s data security in the West and elsewhere.
The region is one of the largest markets for TikTok in terms of sheer number of users, with a total population of 630 million people — half of whom are under the age of 30. Create more than 325 million monthly visitors of the app. However, TikTok has yet to convert this large user base into a significant e-commerce revenue stream in the region as the company faces stiff competition from larger rivals like Sea’s Shopee, Alibaba’s Lazada, and GoTo’s Tokopedia.
“We will invest billions of dollars in Indonesia and Southeast Asia over the next few years,” TikTok CEO Shou Zi Chew said at a forum organized by the company in Jakarta to highlight the social and economic impact of the app in the region.
While the company didn’t provide a detailed overview of its spending plan, it did say it would invest in training, advertising, and supporting small vendors looking to join its TikTok Shop e-commerce platform. Chew added that the content on this platform is becoming more diverse as it attracts more users and expands beyond advertising into e-commerce, allowing consumers to purchase goods via in-app links during live streams.
TikTok currently employs 8,000 people in Southeast Asia and 2 million small vendors who sell their goods on its platform in Indonesia, the region’s largest economy. According to Momentum Works, e-commerce transactions across Southeast Asia totaled nearly $100 billion last year, with Indonesia accounting for $52 billion.
While TikTok enabled $4.4 billion worth of transactions across Southeast Asia last year — up from $600 million in 2021 — it still fell far short of Shopee’s $48 billion in regional merchandise sales in 2022 US dollars back.