TikTok Shop and Shopee: The Battle for Southeast Asia’s E-commerce Dominance

In just two years, TikTok Shop has rapidly evolved from an experimental platform to a significant competitor, challenging Shopee’s long-held dominance in Southeast Asia’s online retail market. What began with creators promoting products like beauty items and kitchen gadgets in short-form videos has transformed into a multi-billion-dollar challenge to traditional search-and-buy e-commerce models.

The Rise of TikTok Shop in Southeast Asia

In 2024 alone, TikTok Shop generated US $22.6 billion in gross merchandise volume (GMV) within the region. This figure positions Southeast Asia as central to TikTok’s commerce ambitions, representing nearly three-quarters of its global e-commerce business, which totaled around US $32.6 billion in the same year. This growth follows a dramatic increase from US $4.4 billion in 2022 to US $16.3 billion in 2023 – a nearly fourfold increase.

This success isn’t limited to Southeast Asia; the same social commerce approach is gaining traction in other regions, including beauty product promotions in the UK and gadget unboxings in the US. TikTok is effectively exporting its social-commerce model globally.

Shopee’s Continued Strength

Despite TikTok Shop’s rapid growth, Shopee remains the largest digital mall in Southeast Asia, controlling over half of the region’s e-commerce GMV in 2024. Shopee’s advantage lies in areas where TikTok Shop is still developing: reliable logistics, large-scale discount campaigns, and a trusted ecosystem that appeals to a broad range of consumers, including cautious older buyers and established brands.

For certain product categories, such as home appliances, fast-moving consumer goods (FMCG), and high-volume sales during major campaigns like 11.11, Shopee continues to be the preferred platform.

The Future of E-commerce in Southeast Asia

The competition between TikTok Shop and Shopee is reshaping the e-commerce landscape in Southeast Asia, moving from mass sales to more targeted segmentation. As both platforms continue to innovate and adapt, consumers will likely benefit from increased choice, competitive pricing, and more engaging shopping experiences.