TikTok’s gross merchandise volume (GMV) for its e-commerce business in the first half of 2022 exceeded $1 billion, which is equivalent to the full-year volume the platform saw in 2021, LatePost reported on August 10. Among them, the average monthly GMV in Indonesia reached $200 million while the average monthly GMV in the UK was $24 million.
However, compared with its competitors, the scale of TikTok’s e-commerce is still limited. The GMV of Shopee, which belongs to Sea Ltd., exceeded $60 billion in 2021. Alibaba disclosed on its 2021 Investor Day that as of September 2021, its e-commerce platform Lazada’s GMV reached $21 billion.
TikTok’s e-commerce achieved rapid growth in the first half of the year, which benefited from its expansion in Southeast Asia, in addition to its own small volume.
A source close to TikTok’s e-commerce business said that since the end of 2021, TikTok’s Indonesian e-commerce business has seen rapid growth in the entry rate of merchants every month after focusing on increasing investment. This year, April coincided with Ramadan, which is the most common time of the year for Indonesians to shop online. TikTok’s e-commerce took this opportunity to launch a round of promotion activities to attract users. According to official data, TikTok Indonesia’s e-commerce business saw a 493% increase in orders and a 92% increase in GMV during the period.
In the first half of the year, TikTok’s e-commerce division also launched its local and cross-border business in Thailand, Vietnam, Malaysia, the Philippines and Singapore. In these countries, TikTok waived its platform commission for one month and 1% of payment channel fees for new sellers. The above five countries have been able to contribute at least 50% of GMV to TikTok’s e-commerce in Southeast Asia.
The company’s e-commerce team also set a goal of achieving $470 billion in GMV within the next five years, though it currently isn’t easy to achieve this goal. TikTok’s current customer unit price is rather low and, in terms of attracting investment, TikTok’s e-commerce business has not yet solved the problem of difficulty in introducing international brands.