Spread across the tapestry of globalization, some trade routes, established centuries ago, continue to thrive, adapting to modern contexts while retaining their vitality. Southeast Asia exemplifies this resilience—a region that remains a bustling market brimming with untapped potential.
As of 2024, the question of whether cross-border e-commerce should target Southeast Asia no longer required debate. What once seemed like an option had evolved into an imperative.
The region’s economic allure—spanning its highest peaks and deepest reserves—ranks above most other emerging markets. Beyond being a launchpad for Chinese companies venturing abroad, Southeast Asia offers three advantages:
- Growth: Southeast Asia provides vast opportunities for growth across various e-commerce formats, from shelf-based models to content-driven platforms and live streaming. The region’s mature content and influencer ecosystem is a strong indicator of its potential. For example, TikTok claims to serve 325 million monthly active users in Southeast Asia, with a penetration rate exceeding 50%. The platform continues to transform content into e-commerce opportunities at a relentless pace.
- Ecosystem: The region’s well-established infrastructure for cross-border e-commerce, including payment systems, logistics networks, and overseas warehouses, makes it operationally primed for international businesses. This ecosystem reduces entry barriers and streamlines operations for companies looking to establish a foothold.
- Alignment: Cross-border brands and e-commerce platforms in Southeast Asia share a common goal: to accelerate localization. Through substantial promotional efforts and logistical support, these collaborations enhance the region’s scalability by aligning capital flows and supply chain integration.
The rise of live commerce
According to market research consultancy Momentum Works, TikTok Shop’s gross merchandise value (GMV) in Southeast Asia nearly quadrupled from USD 4.4 billion in 2022 to USD 16.3 billion in 2023, underscoring the platform’s immense potential.
While emerging markets like the Middle East, North Africa, and Latin America are still developing infrastructure and refining globalization strategies, Southeast Asia has already embraced live commerce. A 2024 digital economy report by Google, Temasek, and Bain & Company predicts video-based e-commerce has grown from less than 5% of consumer activity in 2020 to 20% by 2024—a meteoric rise driven by the region’s unique dynamics.
For businesses, Southeast Asia represents familiar territory, with live commerce drawing on operational expertise gained in China. However, some concerns about local market fit persist. Yet, companies that have thrived in live commerce over the past few years have done so by adapting to Southeast Asia’s distinct needs, recognizing the necessity of going global.
The challenges of globalization often extend beyond market competition to risks and uncertainties. Expanding into Southeast Asia mitigates these risks by leveraging familiar business models, yet success still requires calculated risks. Entering the market isn’t about seeking refuge but engaging in a high-stakes venture.
Southeast Asia’s robust e-commerce ecosystem helps manage these risks. The region boasts mature infrastructure, agile solutions for after-sales services and data compliance, and platform ecosystems that act as “reservoirs” for consumer traffic. Businesses no longer need to invest heavily in traffic generation during their early stages. For example, in September and October 2023 alone, 20 TikTok Shop influencers in Southeast Asia each achieved over USD 1 million in GMV. These local influencers often have stronger fan engagement than brands or platforms, making them key to establishing localized traffic channels and reducing regional risks.
To succeed, companies must adopt an adaptive mindset—refining product strategies based on market insights and exploring new e-commerce pathways. Growth should stem from internal innovation rather than chasing fleeting opportunities.
Take Vanwalk, a Chinese bag brand, as an example. By collaborating with influencers and identifying growth opportunities, the company discovered unexpected success through live commerce. One discontinued product, initially overlooked in China, became a bestseller on TikTok Shop in Southeast Asia, driving strong sales for two months starting in March 2024.
According to a Vanwalk representative, the company’s initial focus was on short videos. However, it soon pivoted to live commerce, which now accounts for 40% of its total GMV. Instead of replicating its China strategies wholesale, Vanwalk tailored its approach to foster stronger connections with users, extend product lifecycles, and build trust.
Established product categories can achieve a second growth curve, while emerging categories can unlock new opportunities. Wosado, a company specializing in soft magnetic eyelashes, illustrates this well.
Wosado carved out a niche by addressing modern women’s desires for efficiency and affordability. Its products offer an alternative to traditional eyelash extensions at a fraction of the cost while solving consumer pain points with innovative technology.
Live commerce has been central to Wosado’s growth. Collaborations with influencers and user-generated content helped establish trust and educate consumers about its products. Since launching on TikTok Shop across five Southeast Asian countries in 2023, Wosado has surpassed 40,000 units in monthly sales.
According to a company representative, TikTok’s influencer ecosystem and cross-border support resolved challenges such as cultural differences and supply chain integration, enabling the brand to thrive in new markets. Wosado’s journey demonstrates the transformative potential of partnering with platforms like TikTok Shop to adapt and flourish in Southeast Asia.
Standing firm
The cross-border e-commerce wave isn’t a sudden torrent but a steadily rising tide, pushing businesses to adapt and innovate. In traditional foreign trade, success often hinged on products and orders, leaving little room for fostering brand connections or offering value-added services. However, in the e-commerce era, digital tools, platforms, and technologies have unlocked new pathways for globalization, enabling businesses to tap into online traffic channels and build systematized operations.
Over the next three to five years, the growing demand for diversified globalization is expected to reshape how businesses localize and integrate into international markets. Momentum Works’ 2024 report revealed that the combined gross merchandise value (GMV) of Southeast Asia’s eight leading e-commerce platforms reached USD 114.6 billion in 2023, a 15% year-on-year increase. TikTok Shop led this growth, with its nearly fourfold surge in GMV solidifying its dominance.
TikTok Shop’s growth can be attributed to two primary factors. First, it pioneered live commerce, redefining how brands engage with consumers. Second, its unmatched ability to capitalize on content and traffic capabilities has set it apart from competitors. While other platforms are still building their live streaming ecosystems, TikTok’s ability to align personalized content with user preferences and convert traffic into transactions remains unparalleled.
TikTok Shop has demonstrated a long-term commitment to live commerce by cultivating local consumer habits and leveraging the expertise of Chinese brands that excel in live streaming. These brands have dominated their respective niches in Southeast Asia, creating a blueprint for success.
For example, Turandot, a lingerie brand, joined TikTok Shop’s Southeast Asia operations in August 2023. Through platform promotions, live stream integrations, and influencer collaborations, Turandot quickly gained prominence, achieving USD 200,000 in GMV in a single day. Similarly, Vanwalk found live commerce to be a game changer; the brand’s monthly GMV on TikTok Shop is now three to four times higher than on other platforms.
TikTok Shop’s influence was further cemented during the Double 12 sale, when its cross-border GMV in Southeast Asia nearly doubled compared to Singles’ Day, setting a single-day sales record for the platform. The event highlighted TikTok Shop’s ability to synchronize short video promotions, influencer engagement, live stream traffic, and multichannel collaboration to drive consumer conversions.
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TikTok Shop’s platform maturity and strong ecosystem provide users with multiple opportunities to engage with brands, enhancing their interactions with local consumers. This approach helps bridge the gap between global brands and local audiences, influencing how consumers interact with businesses.
Clearly, live commerce has become a key driver of TikTok Shop’s global growth. As demand for targeted, high-quality traffic continues to increase, the platform’s ability to deliver measurable results highlights its budding importance in the cross-border e-commerce landscape.
For brands, the goal is no longer just to showcase products but also to build genuine connections with consumers. TikTok Shop’s combination of live streaming and short videos can help businesses to achieve this by fostering direct and interactive engagement.
And while the sustainability of live commerce in international markets remains uncertain, TikTok Shop’s ongoing investment in this model positions it as a key player. Its approach to globalization provides a practical pathway for businesses to expand and succeed in new markets.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xiao Xi for 36Kr.