This is the top eCommerce platform in Southeast Asia this year

Shopee has remained the top eCommerce platform in 2023 in Southeast Asia, maintaining 48% of market share and earning US$55.1 billion gross merchandise value (GMV). 

TikTok Shop comes in second as the largest platform in Southeast Asia, having almost quadrupled its GMV in 2023 (US$16.3 billion), according to a recent study by Momentum Works. 

TikTok Shop is currently at the same scale as long-timers Lazada and Tokopedia. A merger with Tokopedia in Indonesia pits TikTok Shop against Shopee at a similar scale. 

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This year, Lazada has redirected its focus from brands to the supply chain and consumer experience, a part of Alibaba's global war against Pinduoduo-owned Temu and other challenges. 

Temu, on the other hand, entered Southeast Asia in 2023 but has been focusing on North America, Europe and other affluent countries. It might turn more attention to the region after ROI in other markets decline. Currently, it has tested in Malaysia and Philippines, and is looking for a way to add Indonesia to its map, said the report. 

Across Southeast Asia, beauty has emerged as the top category on both TikTok Shop and Shopee. 

Other top categories include home and living, electronics, women's fashion and Muslim fashion. Men's fashion and food and beverage round out the categories. 

Key trends for 2024

As we get through the year, there are four notable trends that will define the narrative of Southeast Asia eCommerce, said the report. 

For starters, eCommerce players will be learning from China and exploring live commerce. In fact, TikTok Shop's active promotion of live commerce is fostering an ecosystem of sellers, service providers, KOLs and MCNs.

In tandem, Shopee has also been vigorously investing in ShopeeLive. Both platforms have spent 100s of millions of dollars on vouchers, discounts and seller support, it said. 

Live commerce is still a work in progress in the region, however top selling KOLs have begun to emerge. This includes Võ Hà Linh from Vietnam, Pimrypie from Thailand and Richard Lee from Indonesia. 

Secondly, platforms are starting to explore generative AI applications to enhance user experience, optimise operations and improve overall efficiency. If leveraged well, AI can drive future competitiveness for ecommerce platforms and ecosystem. 

Another trend for 2024 is consolidation. Moving forward, leading enablers will need to diversify their business and expand service provisions to include software, brand incubation, live commerce, multi-channel networks and supply chain. Expansion into these areas can also be done through in-house development. 

Finally, Momentum Works foresees new competitive dynamics amongst third party logistics players. This is especially since eCommerce platforms have increased emphasis on in-house logistics.

In fact, more than 50% of Shopee orders in Southeast Asia are delivered by ShopeeXpress. This puts pressure on third-party logistics provides, said the report. 

Currently, TikTok Shop has no immediate plans to develop in-house logistics but might just build or acquire its own logistics arm once it deems the ROI of such worthwhile, added the report. 

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