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According to Japanese media NIKKEI on July 16, TikTok, a popular short video app owned by China's ByteDance, is becoming one of the largest e-commerce platforms in Southeast Asia, a market long dominated by local companies such as Shopee and Alibaba's Lazada, an annual study released on Tuesday showed.

Singapore-based consultancy Momentum Works reported that gross merchandise volume (GMV) for the app’s e-commerce platform, TikTok Shop, nearly quadrupled to $16.3 billion last year from $4.4 billion in 2022, the fastest growth rate among rivals in the region.

Together with Indonesia's Tokopedia (in which TikTok acquired a majority stake last year), TikTok's e-commerce platform has surpassed Lazada to become the second largest e-commerce platform in the ASEAN region, with an estimated market share of 28.4% as of last year, the report said.

The report said the region’s e-commerce GMV will reach $114.6 billion in 2023, up 15% from last year. Shopee maintained its lead with a 48% share, followed by Lazada at 16.4%, and TikTok and Tokopedia at 14.2% each.

Li Jianggan, CEO of Momentum Works, said TikTok has become a very important player in Southeast Asia, where the company has pledged to invest billions of dollars.

Lee said: This year, depending on their integration with Tokopedia, they have a good chance of becoming the number one player in Indonesia.

Since its foray into e-commerce in 2021, TikTok has been hiring aggressively in Southeast Asia, while existing companies in the region have laid off employees in a bid to become profitable.

Momentum Works said TikTok's headcount has tripled to more than 8,000 by 2023, making it comparable to Lazada.

In particular, TikTok has expanded its e-commerce capabilities using its live-streaming feature, where influencers and merchants showcase a variety of goods, from beauty and fashion products to home appliances, to help users buy them in real time.

Shopee has been cutting costs to achieve profitability, but amid fierce competition with TikTok, Shopee has begun to take the offensive to defend its market share.

In August, Shopee parent Sea said it would increase investment in live streaming and logistics capabilities.

But TikTok, which has come under heavy scrutiny in the United States and Europe, has also suffered setbacks in Southeast Asia. In Indonesia, TikTok Shop was forced to shut down after the government banned online shopping transactions on social media.

Just a few months later, TikTok said it would invest more than $1.5 billion and acquire a 75% stake in Tokopedia, a leading e-commerce company owned by Indonesian technology group GoTo, to restart its online shopping business in Indonesia.

TikTok and Tokopedia have grown their market share in Indonesia to 39%, second only to Shopee’s 40%. In Vietnam, TikTok Shop is the second largest player with a 24% market share.

Momentum Works arrived at its GMV valuation based on paid orders from major digital retail platforms in Southeast Asia’s six largest economies (Indonesia, Thailand, Vietnam, the Philippines, Malaysia and Singapore), industry interviews and its own estimates.