TikTok, the popular short video app owned by China’s ByteDance, announced its plans to invest billions of dollars in Southeast Asia in the coming years.
This move aims to strengthen TikTok’s presence in the region and address concerns regarding data security amidst growing global scrutiny.
With a collective population of 630 million, half of whom are under 30, Southeast Asia represents one of TikTok’s largest user bases. The video platform attracts over 325 million monthly visitors, but it has yet to fully capitalize on this vast user base in terms of e-commerce revenue. It faces stiff competition from established rivals such as Sea’s Shopee, Alibaba’s Lazada, and GoTo’s Tokopedia.
During a forum organized in Jakarta to showcase the app’s social and economic impact on the region, TikTok CEO Shou Zi Chew stated: “We’re going to invest billions of dollars in Indonesia and Southeast Asia over the next few years.”
While specific details of the investment plan were not disclosed, TikTok intends to allocate funds towards training, advertising, and supporting small vendors interested in joining its e-commerce platform, TikTok Shop.
Chew highlighted the platform’s evolving content diversification as its user base expands. TikTok aims to expand beyond advertising by venturing into e-commerce, enabling users to purchase products through app links during livestreams.
TikTok currently employs 8,000 individuals in Southeast Asia and hosts two million small vendors in Indonesia, the region’s largest economy. E-commerce transactions in Southeast Asia reached nearly $100 billion in the previous year, with Indonesia contributing $52 billion, according to Momentum Works, a consultancy firm.
TikTok facilitated $4.4 billion worth of transactions across the region in the same year, a substantial increase from $600 million in 2021. However, it still trails behind Shopee’s regional merchandise sales of $48 billion in 2022, according to Momentum Works.
TikTok’s investment plan coincides with increased scrutiny from governments and regulators due to concerns that the Chinese-owned company may misuse user data or serve the interests of Beijing.
While some countries, such as Britain and New Zealand, have banned the app on government devices, TikTok dismissed these actions as fundamental misconceptions influenced by wider geopolitical factors. The company has repeatedly denied sharing data with the Chinese government and stated that it would refuse such requests.
Though TikTok has not faced significant bans on government devices in Southeast Asia, it has faced scrutiny regarding its content. In 2018, Indonesia temporarily banned TikTok due to posts containing pornography, inappropriate content, and blasphemy.
Similarly, regulators in Vietnam expressed concerns about toxic content on the platform and launched an investigation into TikTok’s operations, citing threats to the country’s youth, culture, and tradition.