Blog > Marketing > Are TikTok Shops a Threat to Shopee and Lazada’s E-Commerce Dominance?

Are TikTok Shops a Threat to Shopee and Lazada’s E-Commerce Dominance?

Amy 14 Sep 2023 07:50

Now, another social media site is starting to dabble into e-commerce, and it's beginning to gain traction to the point that we have to ask ourselves: Should we start worrying about TikTok?

The advantages of using TikTok Shops:

①. Personal Touch: TikTok's idea to use their social media features and integrate them into their function is an innovative way to build trust between buyers and sellers. With features such as TikTok Live and the ability to directly message sellers, users enjoy having that personal touch as they continue with their purchases.
 

②. Increased Engagement: As TikTok remains primarily a social media app, TikTok Shops have tapped into an entirely different audience. Not everyone on TikTok is on the app to buy something, but, as targeted content is shown to them by the app's algorithm, they are converted into buyers – opening you up to a whole new market to tap into.
 

③. Digital Innovation: As TikTok is still actively going through the development process of their TikTok Shop function, sellers who use TikTok shops will be treated to constant updates that will make the selling process more convenient for them.


 

The dangers of using Tiktok Shops:
 

①. Viability: While using social media trends is an effective marketing strategy, the sustainability of following trends has yet to be established. TikTok Shops' use of current trends may develop to be an unstable means to get engagement if you are a seller looking for a stable and consistent consumer base.
 

②. Limited Products: Knowing the current audience that TikTok has, TikTok Shops are currently centered on their audience's needs. This means that products that you see on TikTok are typically small, trendy, and impulse purchases. While these kinds of products are easily sold and are extremely profitable, sellers with a variety of products will not be able to sell their full range of offerings on the app just yet.
 

③. Security: As TikTok Shops are still in the early stages, buyers' protection when it comes to their purchases such as refund policies and payment information is still being established. This would mean that although there are already policies in place, it will take time to perfect it – time wherein users would not feel entirely safe providing their information which could lead to them looking into using other platforms instead.


 

While TikTok Shops' integration of e-commerce may yet develop into a real threat to established e-commerce platforms such as Shopee and Lazada, their dependence on social media may just be a challenge to the traction they are slowly gaining. Shoppee and Lazada remain two of the most-used e-commerce platforms with 72 million and 37 million monthly users respectively while TikTok's current ballpark of 40 million active users only has about 39% of their user base actively shopping on TikTok shops as they mostly use the app for other means.
 

With this, Shopee and Lazada remain the dominant players in Southeast Asia's e-commerce market, with a strong presence and a loyal customer base. Both platforms have invested heavily in marketing, logistics, and user experience to solidify their positions as leading e-commerce platforms – a fact their users are well aware of.
 

Using TikTok Shops for your business will allow you to grow a bigger audience, but depending on the variety of your products or services, you would still have to use other platforms for your listing, which may not be the most cost-efficient way to market your products. The future will likely witness increased competition among these platforms along with a few other social media sites wanting to get in on the action. As the number of platforms increases, it will be up to each platform's strategy on how to dominate the world of e-commerce.