TikTok will invest billions of dollars in Southeast Asia to boost e-commerce

JAKARTA, June 15 (Reuters) – Short video app TikTok, owned by China’s ByteDance, said on Thursday it would invest billions of dollars in Southeast Asia over the next few years, while doubling down on the region amid a increasingly intense global scrutiny over its data. security.

Southeast Asia, a region with a collective population of 630 million, half of them under the age of 30, is one of TikTok’s largest markets in terms of user numbers, generating more than 325 million app visitors every year. month.

But the platform has yet to translate the large user base into a major source of e-commerce revenue in the region, as it faces fierce competition from larger rivals to Sea’s. (SE.N) Shopee, Alibaba’s (9988.HK) Lacing and GoTo’s (GO A.JK) Tokopedia.

“We are going to invest billions of dollars in Indonesia and Southeast Asia over the next few years,” TikTok CEO Shou Zi Chew said at a forum he organized in Jakarta to highlight the app’s social and economic impact on the region.

TikTok did not provide a detailed breakdown of the spending plan, but said it would invest in training, advertising and support for small sellers looking to join its TikTok Shop e-commerce platform.

Chew said its platform’s content was becoming more diversified as it adds more users and expands beyond advertising into e-commerce, allowing consumers to purchase products through in-app links during streaming. alive.

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

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

TikTok facilitated $4.4 billion in transactions across Southeast Asia last year, up from $600 million in 2021, but still lags far behind 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 further its interests.

Countries including Britain and New Zealand have banned the app on government phones, moves that TikTok said it believed were based on “fundamental misconceptions” and driven by broader geopolitics.

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

The app has not faced any major bans on government devices in Southeast Asia, but it has come under scrutiny for its content.

Indonesia presented one of its first big global policy challenges in 2018, after authorities briefly banned TikTok for posts they said contained “pornography, inappropriate content and profanity.”

In Vietnam, regulators said that Investigation TikTok’s operations in the country because the platform’s “toxic” content poses a threat to its “youth, culture and tradition.”

Reporting by Stanley Widanto in Jakarta; Additional reporting by Anne Marie Roantree in Hong Kong and Fanny Potkin in Singapore; Written by Miyoung Kim; Edited by Christopher Cushing and Jamie Freed

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