TikTok Shop Narrows the Gap with Shopee in Southeast Asia’s E-Commerce Market

Why It Matters

The narrowing rivalry reshapes Southeast Asian e‑commerce dynamics, influencing investor valuations and forcing Shopee to defend its margin and market leadership.

Key Takeaways

• TikTok Shop holds 41% Vietnam e‑commerce market share 2025
• Shopee’s share fell to 56%, down from 61% in 2023
• Two platforms command 97% of Vietnam’s online GMV
• Shopee’s EBITDA‑to‑GMV margin projected at 0.9% FY2026
• TikTok US GMV reaches $15.1 bn, 68% YoY growth

Pulse Analysis

Vietnam has become the litmus test for the evolving power balance between TikTok Shop and Shopee. Metric’s 2025 report shows the two platforms dominate the market, together generating $16.4 billion in GMV and leaving only a marginal slice for Lazada and Tiki. The rapid climb of TikTok—from a 24% share in 2023 to over 40%—highlights the platform’s success in leveraging its short‑form video ecosystem to drive higher parcel volumes, even if average order values remain lower than Shopee’s.

For Shopee, the encroaching competition translates into tighter profit margins. Analysts forecast an adjusted EBITDA‑to‑GMV margin of just 0.9% in FY2026, a modest improvement that could stall if TikTok Shop continues its aggressive pricing and live‑commerce tactics. In response, Shopee has doubled down on loyalty through ShopeeVIP, accelerated its in‑house logistics, and expanded Shopee Live to retain shopper attention. These defensive moves aim to boost repeat purchases and offset the price‑sensitivity that TikTok’s entertainment‑driven model exploits.

Beyond Southeast Asia, TikTok Shop’s momentum is evident in the United States, where it logged $15.1 billion in GMV in 2025, a 68% year‑on‑year increase. The platform’s ability to attract high‑performing merchants and influencers suggests a scalable model that could challenge established players globally. While Shopee retains structural advantages—broader GMV, integrated logistics, and financial services—the intensifying rivalry signals a shift toward a more contested duopoly, compelling both firms to innovate or risk eroding their market footholds.