TikTok Shop's E-commerce Opportunities in Southeast Asia

Before 2019, the e-commerce market in Southeast Asia was still in a growth stage. The common impression of Southeast Asia was store groups, extensive stocking, and virtual warehouses. After 2019, especially after the outbreak of the pandemic, the Southeast Asian market began to become relatively compliant and increasingly mature. For example, sellers were required to prepare goods in overseas warehouses, and a batch of Chinese sellers began to take root in the local Southeast Asia.

The entry of TikTok Shop has brought a new wave of opportunities to the entire Southeast Asian market, where live streaming and short-video e-commerce have become popular. However, in the view of Lin Chao, CEO of Cpsea, a cross-border guide, currently, for TikTok Shop's e-commerce opportunities in Southeast Asia, the time left for sellers to hesitate is running out.

In the past few years in Southeast Asia, Lazada presented a state more similar to the domestic impression of JD.com, with mainly male customers and a relatively higher average transaction value compared to Shopee and TikTok Shop. Shopee is more like a combination of domestic Taobao and Pinduoduo, with more female users and students, and its average transaction value is also the lowest rolled out in Southeast Asia. With years of competition between the two platforms, both have mutually penetrated into each other's domains.

TikTok Shop differs from Lazada and Shopee in terms of model and operational habits. Short videos and live streaming are a new wave of opportunities brought by TikTok Shop. Sellers collaborate with overseas talent with the help of the Chinese supply chain. Massive numbers of talent assist in distribution. As long as the products are suitable, the effect brought is twice the result with half the effort.

Under this model of TikTok Shop, the true salespeople and the true sellers are the local people overseas. Chinese sellers are more like a brand owner and supplier. Because locals definitely understand the local situation better, whether in terms of language or culture. Of course, sellers shouldn't expect to hire a few people who speak minor languages and conduct live streaming in China. There are several problems with cross-national live streaming:

First, the stability of the dedicated network.

Second, there are some restrictions on the platform. Because cross-national live streaming is strictly speaking perhaps a bit illegal. Many suppliers of dedicated lines have to report to the public security bureau, stating that this client is engaged in normal trade and business. Cross-national live streaming itself faces many restrictions on both the platform and the terminal.

Currently, there are many local overseas service providers who can well assist Chinese merchants in going overseas to the local area and conduct local sales well.

From the perspective of product category development, all platforms are the same. In the early stage, it must be dominated by small and medium-sized items and low average transaction value. With the maturity and compliance of the platform and the launch of overseas warehouses, some large items and high average transaction value products will emerge, and then there will be categories with even higher thresholds such as food and fresh produce. Lin Chao said that this year, many merchants who started to do catering overseas or engage in food export have been contacted. Food is also a relatively large category at various overseas stations of TikTok Shop, and the opportunities are still relatively large.

At present, the six hot-selling categories of TikTok Shop cross-border are: fashion clothing, 3C electronics, household daily necessities, beauty and personal care, outdoor products, and jewelry and crystals.