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For the past few years, my commentary on regional ecommerce has revolved around the competition between Shopee and Lazada. The ambitious upstart from Singapore ended up pushing out the former market leader, even though it received backing from Chinese Alibaba.
And just when it seemed that the war was settled, that Shopee would reign over Southeast Asia with its rivals scrambling for the breadcrumbs it left behind, TikTok—of all the brands—has decided to enter the fray as well.
But what does a social media company know about running an online store? How can it be a match for industry veterans?
Well, one thing it does know is that those veterans have to pay for access to eyeballs that it owns. And if that’s the case, then why not sell to them directly?
Location, location, location
Nobody can sell anything if people don’t know about it. You have to make yourself known or, better still, place your business where the people already are. That is the source of the famous rule of real estate—location trumps everything else.
But it works in the digital world as well. It doesn’t matter how attractive your offer is, or how robust or cheap your product selection is, if nobody is aware of your existence.
And so, major ecommerce companies have had to first spend billions of dollars to position themselves in front of potential consumers—and now continue spending more to keep them coming back.
What’s more, size and brand awareness is no guarantee of enduring success, as the case of Lazada proves.
However, even its successful challenger, Shopee, still operated within the same rules. But what if the next competitor injects himself before customers can ever see you?
That’s what TikTok is trying to do. It is like a landlord who used to rent space for other companies, only to now reserve half of it for himself and compete with them instead.
This is a catch-22 situation for the incumbents. On one hand, they are effectively paying a direct competitor for access to the same audience that TikTok can reach freely through its own platform. On the other, they cannot simply walk away, because TikTok remains a gateway to millions of potential customers.
Meanwhile, TikTok benefits from both sides of the equation. It earns revenue from advertising while also generating income from direct sales to consumers.
Given its rapid growth, the strategy appears to be paying off. Including Tokopedia, which TikTok took control of in 2024, the company now commands close to 30% of Southeast Asia’s e-commerce market. Shopee still leads with a 52% share, but the question is whether it can maintain that dominance.
Monetising boredom
In the consumerist world we’re living in, many purchases are made on impulse. You see something cool, fun, stylish, and you want it.
Over the past few years, short, catchy, viral videos have become one of the most powerful tools for creating demand. Traditionally, however, acting on that impulse required an extra step: clicking a link or searching for the product on a marketplace such as Shopee.
In fact, most traditional e-commerce platforms are built around intent. Consumers typically visit them with a specific goal in mind, whether it is searching for a product, comparing prices, or making a purchase they have already decided on.
TikTok Shop works differently. It creates the desire before the search happens.
A creator tests a product. A livestream host demonstrates it. A short video shows a before-and-after result. A discount appears while the viewer is still watching. The purchase button is not placed after a search query, but inside a moment of attention.
That is a problem for Shopee and Lazada because search-based marketplaces tend to reward scale, logistics and price. TikTok rewards attention, storytelling and impulse.
A seller does not necessarily need the best product listing. He needs a video that converts—and it converts within TikTok Shop, just moments after buyer interest has been piqued.
Millions of people swiping through short clips are regularly exposed to new products, which they can now buy right then and there. The whole ecommerce experience of going to a third-party app or website and completing your checkout there has just been truncated into a few taps in the midst of your social scrolling session.
In other words, TikTok’s approach to ecommerce is not only fulfilling the demand but creating it too, and monetising it before competition ever has a chance.
This is where it gets really dangerous for existing ecommerce platforms.
While there are certain necessary goods that we are buying on a regular basis, which people may habitually visit Shopee, Amazon or Lazada for, consumer demand needs to be regularly refreshed with something new.
And all of those new products are introduced through various forms of content. These days, it’s mostly video—the medium that TikTok dominates over, especially in Southeast Asia.
So, not only does it own the main communications channel, but it gets to create new trends before competitors are even aware of them.
Can it replace big online marketplaces entirely? Most likely not. But it can monopolise access to the latest, most attractive products or even create many of them itself, a little bit like Shein does through its tight integration with Chinese manufacturers.
If it continues its successful run, it could redefine ecommerce forever and encourage other social media giants to follow suit.
- Read other articles we’ve written on tech giants here.
Featured Image Credit: airdone/ depositphotos
