In just two years, TikTok Shop has gone from an experiment to a serious rival, closing in on Shopee’s long-standing dominance of Southeast Asia’s online retail market. What started as creators promoting beauty products or kitchen gadgets in their videos has turned into a multi-billion-dollar challenge to platforms built on traditional search-and-buy models. For Southeast Asia, this shift is changing how shopping happens and who controls it.
In 2024 alone, the platform generated US $22.6 billion in gross merchandise volume within the region. That number puts the region at the heart of TikTok’s commerce ambitions, especially considering its global GMV of around US $32.6 billion the same year. This means nearly three-quarters of TikTok’s worldwide e-commerce business now comes from Southeast Asia. That followed a dramatic year of growth, from just US $4.4 billion in 2022 to US $16.3 billion in 2023, a nearly fourfold increase.
We explore how e-commerce 2.0 in Southeast Asia moves from mass sales to smart segmentation
This surge isn’t confined to Southeast Asia. The same formula is working in other regions, from beauty hauls in the UK to gadget unboxings in the US, underscoring how TikTok is exporting its social-commerce playbook globally.
What makes Southeast Asia stand out, however, is the speed of adoption despite regulatory headwinds.
Despite these trends, Shopee remains far from being dethroned. In 2024, it still controlled over half of Southeast Asia’s e-commerce GMV, making it the region’s largest digital mall by a wide margin. Shopee’s edge lies in what TikTok Shop has yet to master: reliable logistics, massive discount campaigns and a trusted ecosystem that appeals to both cautious older buyers and big-name brands. For categories like home appliances, FMCG or high-volume sales during mega campaigns such as 11.11, Shopee remains the platform of choice.
But as both platforms scale, a critical question emerges: will their strengths withstand growing regulatory pressure across Southeast Asia?
How are regulations testing these platforms?
Indonesia gave the clearest signal in 2023, when it banned direct social media transactions, forcing TikTok Shop offline in its biggest market. The decision was framed as protecting local SMEs from being undercut, but it also reflected broader anxieties about data control and the blurred lines between media and commerce. TikTok’s response was swift: it acquired a 75% stake in Tokopedia, Indonesia’s largest homegrown marketplace and re-entered under a structure regulators would approve. That move underscored how deeply TikTok views Southeast Asia as central to its commerce ambitions and how quickly it is willing to adapt.
Shopee has not faced bans of that magnitude, but it hasn’t escaped scrutiny either. Regulators in markets like Vietnam and Malaysia have raised concerns over pricing strategies, seller treatment and aggressive discounting campaigns. Unlike TikTok, however, Shopee operates on a more traditional marketplace model, which makes it easier to fit within existing regulatory frameworks.
The bigger issue for TikTok Shop lies in the “grey zones” of social commerce. Questions about influencer transparency, algorithm-driven product promotion and consumer protection are not unique to Southeast Asia and they are also being debated in the US and Europe, but in a region where e-commerce intersects closely with SME livelihoods, governments are especially sensitive.
In the long run, Shopee’s compliance-first structure may prove to be an advantage as governments tighten rules. TikTok, meanwhile, will need to prove that it can manage both the speed of its growth and the scrutiny that comes with it.
Understanding the demographics and why it matters
TikTok Shop and Shopee are fighting for the same market, but their customer bases look very different and brands are learning how to serve both.
TikTok Shop wins with youth. Its core audience is Gen Z and younger millennials, who are comfortable discovering products through influencers, viral clips and livestreams rather than through search bars.
For SMEs and direct-to-consumer brands, this creates a golden opportunity. We see how startups that struggled to gain traction on Shopee saw their sales spike after a TikTok video went viral. Or how snack sellers are using livestream “taste tests” to turn curious viewers into instant customers, something Shopee’s marketplace model simply doesn’t replicate. On the other hand, Shopee wins with scale and trust. Older consumers, who care more about reliable delivery, clear tracking and familiar payment methods like COD, continue to prefer Shopee. This trust also makes Shopee the natural choice for big brands. Unilever in Vietnam, for example, experiments with TikTok Shop for product launches aimed at younger audiences, but when it comes to mega sales events like 11.11 or 12.12, it still relies on Shopee’s logistics backbone to move products at volume.
The result is not one platform replacing the other, but a two-track ecosystem: TikTok Shop dominates discovery and impulse, while Shopee dominates scale and dependability. For businesses, the question is no longer which platform to choose; it’s how to balance both without losing focus on the audiences that matter most.
In a nutshell
TikTok Shop’s rapid climb shows that Southeast Asia is ready for e-commerce built around content, community and impulse-driven buying. But Shopee’s ability to hold its ground underscores that scale, logistics and consumer trust are still the backbone of the industry.
Rather than one platform replacing the other, the region’s digital mall is evolving into a two-sided marketplace: TikTok Shop as the driver of discovery and Shopee as the guarantor of reliability. The real contest isn’t just about sales figures, it’s about who earns lasting trust from consumers and that will decide the shape of Southeast Asia’s e-commerce future.