Shopee’s latest conundrum

In The Checkout this week, we look at Shopee’s bet on short video and examine the implications of TikTok’s potential US ban in Southeast Asia. [Read from your browser]( The Checkout 🛒  --------------------------------------------------------------- Welcome to The Checkout! Delivered every fortnight, this free newsletter breaks down the biggest stories and trends in ecommerce. You can find past issues [here]( or [sign up here]( to receive future newsletters. Also, If you’re not a subscriber, get access by [registering here](. IN FOCUS In today's newsletter, we spotlight: - Shopee and the ecommerce platforms [mimicking TikTok Shop]( - What a potential ban for TikTok in the US might mean for Southeast Asia - Why Temasek is making a bet on [Yuu]( the consumer loyalty platform --------------------------------------------------------------- Hello {NAME} How much time do you spend on TikTok? In Southeast Asia, over 500 million people spend [10 hours a week]( on social media platforms. Ecommerce platforms, too, are now vying for consumers’ share of attention. Expecting viewers and creators to use a shopping app as they would a social media app, though, is a tall order. In this week’s Big Story, my colleague Jofie looks at Shopee’s efforts to dial up its short-video offerings and build up a content library. The ecommerce marketplace isn’t just drawing sellers onto the platform, it’s also enticing content creators to upload the same videos they would on TikTok - from funny sketches to life hacks. Of course, Shopee isn’t the only ecommerce platform trying to mimic TikTok Shop’s success - Lazada and Tokopedia have also introduced short-video features on their respective marketplaces. But those early efforts could be threatened by a potential ban on TikTok in the US, which may cause the firm to redirect efforts into Southeast Asia. I examine the potential impact of that in this week’s Hot Take. -- Melissa  --------------------------------------------------------------- THE BIG STORY [Shopee ramps up short-video efforts, but can it fend off TikTok Shop?]( Shopee is offering deep discounts on its short videos channel to draw in younger users, creators, and new sellers. It's already seeing some results. ---------------------------------------------------------------  THE HOT TAKE TikTok’s US ban might not be good news for Southeast Asia Here’s what happened: - Last week, the US Congress [passed a bill]( that mandated ByteDance, TikTok’s parent firm, to divest the short-video app’s US assets in 270 days or face a ban. - ByteDance would choose to shut down its US operations rather than sell it, said a Reuters [report]( citing sources. - TikTok is set to challenge the bill on First Amendment grounds. Here’s our take: Could a potential TikTok ban in the US lead to the short-video app focusing more of its efforts in Southeast Asia, where it has [more than 325 million]( monthly active users? Observers think so. While Southeast Asia may not match the US in terms of market size, spending power, or advertising dollars - TikTok’s main revenue stream - an outright ban will likely force the company to refocus its efforts in its other existing markets. Indonesia and its 125 million TikTok users - which makes it the firm’s second largest market after the US - becomes of interest. In a recent interview, Jianggan Li, founder and CEO of venture builder Momentum Works, [said]( he expects TikTok to devote more resources to ensure it is compliant in existing markets. That said, the short-video app has faced its fair share of scrutiny in Asia. It has been banned in India since 2020, has [faced a probe]( in Vietnam over “offensive” and “toxic” content in the country, and [narrowly]( made a comeback in Indonesia after merging with local ecommerce platform Tokopedia. In Malaysia, where TikTok does not have a representative, it also came under scrutiny last year over the [spread of fake news]( on the platform. See also: [TikTok walks a tightrope in Malaysia as officials step up rhetoric]( What might devoting more resources in Southeast Asia look like? Ecommerce marketplaces from Shopee, Lazada, and Tokopedia will find little reprieve, just as they’ve stepped up on their short video and livestreaming offerings, where they’ve [made some inroads](. TikTok could see bigger pushback from entrepreneurs and SMBs who are seeing their margins being pinched by Chinese sellers and their [cutthroat prices]( already a sore point for SMBs in Malaysia. For the many sellers who now depend on TikTok Shop for a living, however, more seller support could be a boon. Already, TikTok CEO Shou Zi Chew [said in 2023]( that the firm is looking to invest “billions of dollars” in Indonesia and the rest of Southeast Asia over the next few years. The firm had also planned to invest US$12.2 million over the next three years into supporting over 120,000 small businesses and entrepreneurs in the region, he said at the time. That might well increase. See also: [Asian tech feels the heat as regulators bare teeth]( Not everyone, though, is overly concerned with TikTok’s eventual fate in the US. TikTok is “not going away,” Mike Pusateri, CEO of Los Angeles-based Bent Pixels, told me earlier this month. The firm connects YouTube creators with brands, and it also works with TikTok creators in Asia to do the same via Bent Pixels Asia - a joint venture between Bent Pixels and Hepmil Media Group. He believes that TikTok “will be acquired … I do think there probably needs to be some slight algorithm changes and some other adjustments in the US market - I think that’ll occur if it’s owned by a US company - but it’s not going away.”  ---------------------------------------------------------------  NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the ecommerce scene [here](. 1️⃣ [GoTo to divest Tokopedia’s logistics unit in Q2 2024]( Following the divestment, the logistics unit will return under Tokopedia. However, GoTo’s B2B delivery business and on-demand delivery unit will stay within the group. 2️⃣ [SGX-listed 17Live posts 26% rise in 2023 adjusted earnings, revenue falls]( This came on the back of a 37% year-on-year increase in operating income. 3️⃣ [Bukalapak hits adjusted EBITDA profitability, logs 16% revenue jump in Q1]( The Indonesia-based ecommerce firm attributed the growth to its online-to-offline unit, Mitra Bukalapak, which contributed 55% of the group’s total revenue for the period. 4️⃣ [FirstCry IPO delayed due to undisclosed metrics]( The Securities and Exchange Board of India said the baby commerce firm had not abided by its listing rules by failing to disclose numbers such as average order value, yearly transacting customers, and total orders. 5️⃣ [Zilingo ex-CEO’s criminal complaint is retaliation against whistleblowers: source]( Ankiti Bose, who filed a criminal complaint against fellow founder Dhruv Kapoor and ex-COO Aadi Vaidya last week, claims her two ex-colleagues misled her and Zilingo’s investors for financial gain.  ---------------------------------------------------------------  FYI 1️⃣ [Demystifying Yuu, the Temasek-backed consumer loyalty program]( Is it a national loyalty program meant to benefit all Singaporeans? Or is it a multimillion-dollar experiment by Temasek on an emerging tech? 2️⃣ [Ninja Van lays off about 10% of regional tech team]( The Singapore-based logistics company's revenue declined 7% year on year in FY 2023, mainly due to an almost 20% drop in parcels handled. ---------------------------------------------------------------  EVENTS HAPPENING You can also check out a curated list of trending tech events [over here]( and Tech in Asia’s signature events [here](. [Saigon Summit 2024 : Charting Vietnam’s Tech Future on May 30]( Put your startup on the map at our signature trade show, Startup Showcase, and get the attention of hundreds of tech professionals. Your next investor or business partner could be among the crowd! Only 30 slots are available, and the competition is fierce. [Sign up before May 3]( and make sure your startup doesn’t get left behind! [Tech in Asia Conference Kuala Lumpur 2024: Malaysia on The Rise on July 24-25]( We've got everything covered from macro trends shaping the landscape to the hottest emerging tech. Join us for inspiring keynotes on the Main Stage, deep dives in the Founders Summit, and actionable insights across dedicated growth tracks. Don't miss out - [purchase your tickets]( today! [Product Development Conference (Jakarta, 25-26 June 2024)]( In this edition of Tech in Asia’s flagship conference for product talent, get access to keynote presentations, interactive Q&As, and networking opportunities that help you to build, launch, and scale world-class products. Early-bird tickets are gone, but fear not—you can now grab first-release tickets at 50% off! Better yet, bring 2 friends and secure an extra 20% off. [Secure your spot now](. [Tech in Asia’s Founders Meetup in Vietnam on May 30]( Founders Meetup is returning to Vietnam as part of the official closing party of Saigon Summit! Unwind and connect with founders, startup leaders, and investors from across the region at this premier networking mixer. Early bird tickets are fully redeemed – [get yours at US$12 now]( --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you soon! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2024 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894