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TikTok Shop vs Temu in SEA | Impulso 84

Introduction

Introduction

Hello everyone, welcome to episode 84 of the Impulso Podcast by Momentum Works. Today, we will present a snippet from the press release for our "E-Commerce in Southeast Asia 2024" report, launched this week.

Good afternoon! We scheduled an hour to discuss the findings of our report on e-commerce in Southeast Asia, which will be available to the public tomorrow. With me today is Wean, our Insight Lead at Momentum Works, the primary author of this report.

Growth and Market Dynamics

In 2023, e-commerce platforms faced several uncertainties and challenges but grew significantly over the last few years. The gross merchandise value (GMV) from eight major platforms in Southeast Asia reached approximately $ 114.6 billion, up 15% from 2022. This growth has been uneven across different platforms and countries.

Country-Specific Analysis

Indonesia remains the largest market in Southeast Asia, reaching a GMV of $ 53.8 billion in 2023, accounting for about 46.9% of the entire region's GMV. Thailand and Vietnam showed the most significant growth, with Vietnam growing by 52.9% and Thailand by 34.1%. The Philippines, Malaysia, and Singapore also recorded decent growth.

Market Share by Key Players

Shopee leads all countries with a GMV of $ 55.1 billion, followed by Lazada at $ 18.8 billion. TikTok Shop has now caught up with Tokopedia in terms of its GMV, reaching $ 16.3 billion. When combined, TikTok Shop and Tokopedia could become the second-largest e-commerce platform in Southeast Asia.

Live Commerce

The rise of live commerce, particularly driven by TikTok Shop, has been a significant trend in Southeast Asia. Insights from live commerce immersions in China revealed that supply chain management is a crucial factor for success in live commerce.

Generative AI Adoption

E-commerce platforms are increasingly leveraging generative AI to enhance customer experiences and operational efficiency.

E-commerce Enablers

Platforms are working with various e-commerce enablers to streamline operations and improve supply chain effectiveness.

Third-Party Logistics Providers

Logistics is a critical infrastructure for e-commerce. Shopee's in-house logistics arm, Shopee Express, now handles over 50% of Southeast Asia orders and 70% in Brazil, putting pressure on third-party providers like J&T Express.

TikTok Shop and Logistics

Rumors suggest that TikTok Shop may build its own logistics network in Southeast Asia, although this is yet to be confirmed. If the ROI becomes positive, TikTok may invest in its logistics infrastructure.

Temu’s Entry into Southeast Asia

There is speculation about Temu, the overseas arm of Pinduoduo (PDD) Group, entering Indonesia. While Temu has approached local payment and logistic providers, it may adopt a different model from its cross-border approach in other markets.

Global Expansion

Since its launch in September 2022, Temu has expanded to 72 countries and territories, with its GMV growing steadily. Analysts believe Temu may even be close to achieving break-even.

Conclusion

The competitive dynamics and strategies of key players in Southeast Asia's e-commerce landscape are continuously shifting. The ability of platforms to navigate these currents will define the end game. Evaluating the leadership and organizational structure of these platforms can provide valuable insights into their future success.

Keywords

  • E-commerce
  • Southeast Asia
  • GMV
  • Shopee
  • Lazada
  • TikTok Shop
  • Tokopedia
  • Temu
  • Live Commerce
  • Generative AI
  • Logistics

FAQ

Q: What is the current GMV of major e-commerce platforms in Southeast Asia?

A: The combined GMV of eight major e-commerce platforms in Southeast Asia reached approximately $ 114.6 billion in 2023.

Q: Which country leads in e-commerce GMV in Southeast Asia?

A: Indonesia leads with a GMV of $ 53.8 billion, accounting for 46.9% of the region's total GMV.

Q: How has TikTok Shop performed in Southeast Asia?

A: TikTok Shop has significantly grown, reaching a GMV of $ 16.3 billion and is now on par with Tokopedia.

A: Key trends include the rise of live commerce, adoption of generative AI, collaboration with e-commerce enablers, and the importance of logistics.

Q: Is Temu considering entering the Southeast Asian market?

A: While there is speculation about Temu entering Southeast Asia, particularly Indonesia, it may adopt a different model from its cross-border approach in other markets.

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