TikTok is expanding its e-commerce ambitions in Southeast Asia.
The widely popular short-form video-sharing platform is in talks with the Indonesian government to get a payment license to expand its e-commerce platform.
TikTok previously launched its e-commerce platform in late June to "revolutionize the way people shop."
TikTok's 'Everything App' Ambitions
Elon Musk is not the only one with ambitions to turn an app into an "everything app." TikTok's launching of its shopping feature called "Trendy Beat," allowed it to become a platform where people can shop on its app while also posting/watching 30-second videos simultaneously.
TikTok's "Trendy Beat" section showcases products that have gained popularity through trending videos, from tools to extract ear wax and many other items. These items are from TikTok's own line of products, specifically from a subsidiary of its parent company, ByteDance, per Tech Crunch.
While this attempt at an e-commerce platform was first tested in the UK, it resonated well in Southeast Asia. A fact the company means to capitalize on.
TikTok is in the early-stage talks with Indonesian regulators to obtain a payments license in Indonesia, which would further its e-commerce ambition and improve its app, according to Reuters, who reported the news first.
From what it sounds, TikTok's negotiations with Indonesia's regulators are going smoothly. Two Reuters sources, who were briefed on the plan, said that Tiktok's application for a payments license is being viewed favorably.
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For those unaware, a payments license is an authorization for the holder to provide services related to the payment systems, per Tetra Consultants. If TikTok obtains this from the Indonesia-based regulators, the company's app can accept and process payment transactions in the country for its e-commerce platform.
Reuters reached out to a representative for Indonesia's central bank, Bank Indonesia, for a comment. Unfortunately, the company did not give the publication a response.
The news of this expansion isn't entirely surprising. It follows an announcement from company CEO Shou Zi Chew in June stating that TikTok would invest billions of dollars in Indonesia and the rest of Southeast Asia. Indonesia is the biggest country in Southeast Asia, and 109.9 million of its citizens are using TikTok in 2023, per World Population Review - a good enough reason to expand its market there.
Competition From Other E-Commerce Sites
Despite TikTok's popularity, the app must face competition from other, more established e-commerce apps in the region. These apps include Amazon, Singapore's Shopee, and home-based competitors like Alibaba's Lazada and Shein.
The company seems to have no choice in the matter. Its TikTok Shop, which allows merchants, brands, and creators to showcase and sell their products on the app, wasn't as successful in the UK. However, it did become popular in Asian markets, particularly in Southeast Asia becase of the app's popularity in the region.
Whether TikTok's e-commerce platform can pull through despite the competition from other established apps is up for debate.
Related Article: TikTok Takes on Retail Titans Amazon And Shein With 'Trendy Beat'
