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The gross merchandise value (GMV) of TikTok e-commerce in 2021 totaled about 6 billion yuan ($951 million), of which 70% or more came from Indonesia and the remaining 30% or less came from the U.K., according to sources of Chinese tech media outlet 36Kr.
In addition, TikTok’s e-commerce division is targeting nearly 12 billion yuan in GMV for 2022, nearly doubling from 2021 levels. On the other hand, the e-commerce business of TikTok’s Chinese mainland counterpart Douyin previously attained a GMV of about 500 billion yuan in 2020, the year of its establishment.
Having also now operated for a year, TikTok e-commerce’s GMV last year was only 1% of that achieved by Douyin e-commerce in 2020, with the vast majority contributed by the Indonesian market.
In April 2021, TikTok piloted the live e-commerce business, with Indonesia and the U.K. serving as the initial target markets. An individual close to TikTok’s e-commerce division said that during a review meeting at the end of last year, an official stated that the GMV from Indonesia accounted for more than 70% of all TikTok e-commerce. Meanwhile, daily GMV from the entire U.K. market was only about the volume of a medium-sized livestreaming online store in China.
The remarkable success of the Indonesian market in its first year of trial is attributed to the scale and maturity of the local e-commerce market. Data from research firm Momentum Works show that e-commerce sales in Indonesia reached $32.2 billion in 2020, ranking fourth in the world after China, South Korea and the U.K., making it the largest e-commerce market in Southeast Asia. As per SenseTower data, TikTok has garnered about 200 million user downloads in Indonesia, accounting for more than 40% of the entire Southeast Asia region.
Southeast Asia is also the first major overseas market for Chinese e-commerce companies to access. Alibaba laid out its own Southeast Asian e-commerce market by acquiring Lazada in 2016, before Tencent-backed Shopee surpassed Lazada in 2019, becoming the largest e-commerce platform in the region. The two platforms have initially cultivated the online shopping habits of Indonesian users by drawing on their experience operating e-commerce business in China.
Unlike Indonesia, no Chinese e-commerce platform had ever made its way into the U.K. market. Thus, Chinese e-commerce platforms have no prior advantages in terms of logistics, supply chains or other areas. Moreover, it takes time for the firms to promote live shopping habits among local users. A TikTok service provider said the team’s live e-commerce GMV from the U.K. mainly relies on TikTok’s official subsidies for 3C categories. For example, an iPhone is subsidized by up to 20% on the platform.
SEE ALSO: ByteDance’s TikTok Shop Enters Thailand, Vietnam and Malaysia
After March this year, TikTok will also open its livestream e-commerce business in more Southeast Asian and Western European countries.
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TikTok is preparing to launch a warehousing plan called “Aquaman” for its e-commerce business in the UK market in the near future.
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.
ByteDance’s TikTok has set a goal to reach 1.05 billion daily active users (DAUs) globally by the end of 2022. The popular short video platform currently has more than 800 million DAUs.
On November 10, news that TikTok Shop will be launched in US was finally confirmed. In order to register for TikTok Shop in the US, merchants will need to use a domestic mobile phone number and email address, or an existing TikTok account. An invitation code is also required.
Pandaily is a tech media based in Beijing. Our mission is to deliver premium content and contextual insights on China’s technology scene to the worldwide tech community.
The automated manchine translation of regional languages is powered by NiuTrans.
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