TikTok to invest billions of dollars in Southeast Asia

iStock [illustration]

Short video app TikTok, owned by China's ByteDance, said on Thursday it would invest billions of dollars in Southeast Asia over the next few years, as it doubles down on the region amid intensifying global scrutiny over its data security.

Southeast Asia, a region with a collective population of 630 million - half of them under 30 - is one of TikTok's biggest markets in terms of user numbers, generating more than 325 million visitors to the app every month.

But the platform has yet to translate the large user base into a major e-commerce revenue source in the region as it faces fierce competition from bigger rivals of Sea's Shopee, Alibaba's Lazada and GoTo's Tokopedia.

"We're going to invest billions of dollars in Indonesia and Southeast Asia over the next few years," TikTok CEO Shou Zi Chew said at a forum it organised in Jakarta to highlight the social and economic impact of the app in the region.

TikTok did not provide a detailed breakdown of the spending plan, but said it would invest in training, advertising and supporting small vendors looking to join its e-commerce platform TikTok Shop.

Chew said content on its platform was becoming more diversified as it adds more users and expands beyond advertising into e-commerce, allowing consumers to purchase goods through links on the app during livestreaming.

TikTok has 8,000 employees in Southeast Asia, and 2 million small vendors selling their wares on its platform in Indonesia, the region's biggest economy, he added.

E-commerce transactions across the region reached nearly $100 billion last year, with Indonesia accounting for $52 billion, according to data from consultancy Momentum Works.

TikTok facilitated $4.4 billion of transactions across Southeast Asia last year, up from $600 million in 2021, but it still trailed far behind Shopee's $48 billion of regional merchandise sales in 2022, Momentum Works said.

TikTok's investment plan comes as the Chinese-owned company faces scrutiny from some governments and regulators because of concerns that Beijing could use the app to harvest user data or advance its interests.

Countries including Britain and New Zealand have banned the app on government phones, moves TikTok said it believed were based on "fundamental misconceptions" and driven by wider geopolitics.

TikTok has repeatedly denied that it has ever shared data with the Chinese government and has said the company would not do so if asked.

The app has not faced major bans on government devices in Southeast Asia, but it has been under scrutiny over its content.

Indonesia presented one of its first major global policy challenges in 2018, after authorities briefly banned TikTok for posts they said contained "inappropriate content and blasphemy".

In Vietnam, regulators said it would probe TikTok's operations in the country because "toxic" content on the platform poses a threat to its "youth, culture and tradition".

More from Business

  • Aviation sector contributes $4.1 trillion to global economy

    The UAE's Minister of Economy and Chairman of the General Civil Aviation Authority (GCAA), on Monday emphasised the aviation sector's critical role in the global economy, noting that it accounts for 12 to 13 per cent of GDP in some countries and supports millions of jobs worldwide.

  • Paris AI summit draws world leaders

    World leaders and technology executives are convening in Paris on Monday to discuss how to safely embrace artificial intelligence at a time of mounting resistance to red tape that businesses say stifles innovation.

  • 16% growth in new economic licences in Abu Dhabi during 2024

    The Abu Dhabi Registration and Licensing Authority (ADRA), which develops and regulates the business sector, on Monday revealed significant growth in business licences and compliance indicators in the Emirate's mainland and non-financial economic free zones during 2024.

  • DEWA updates billing on water consumption

    Dubai Electricity and Water Authority (DEWA) has announced that it will adopt the cubic metre as the standard unit for measuring water consumption starting from the March 2025 billing cycle.

  • UAE, Japan to complete CEPA by end of year

    The UAE Minister of State for Foreign Trade, Dr. Thani bin Ahmed Al Zeyoudi, has said negotiations for the Comprehensive Economic Partnership Agreement (CEPA) between the UAE and Japan will be completed before the end of 2025.