23-6-2023 (JAKARTA) TikTok shopping frenzy hits Indonesia as users spend more money on the app than anywhere else in Southeast Asia: Indonesian TikTok users spent more money on the app than any other Southeast Asian country over the past year. The trend has led to a clamour for TikTok shopping in the country, with entrepreneurs flocking to the platform to promote a range of products, including tech, fashion and homemade goods.
The region is a bright spot for TikTok, which is owned by Chinese tech firm ByteDance, following months of intense scrutiny in the United States and other nations over users’ data security and the company’s alleged ties to Beijing. Last week, TikTok CEO Shou Zi Chew announced plans to invest billions of dollars in Southeast Asia, where it counts 325 million users, of whom 125 million are in Indonesia.
TikTok Shop has capitalised on the Indonesian market, amassing over two million sellers since it launched last year. The platform’s e-commerce features allow sellers to reach new markets randomly instead of relying on interest-based search results on rival sites. The algorithm has jumpstarted businesses, with Monomolly, an online retail employer, reporting a 30% increase in revenue since kicking off a TikTok livestream drive last year.
DIY home streamers Panji Made Agung and Astari Gita sell as many as 1,000 cookie jars a month through TikTok livestreams, making 25 million rupiah (US$1,700). Their viewers and sales ramped up because of their personalities, with Gita often flirting with her husband and making him feel uncomfortable on camera. TikTok Shop takes a commission of 1% and a charge of 20,000 rupiah for every item sold, building a growing market share against more established and bigger rivals.
Indonesia accounted for 42% of TikTok’s US$4.4 billion regional gross merchandise value (GMV) last year, according to Singapore-based consultancy Momentum Works. Experts say TikTok’s Indonesia strategy is catching on with shifting shopping habits as younger customers demand more engaging experiences to open their wallets. The country’s digital market is dominated by Generation Z, which is adaptive to new things, causing the market patterns to change swiftly. Southeast Asian online shopping, pulled along by the trend in Indonesia, is predicted to become a US$35 billion market next year.
