Alphabet Inc’s YouTube has partnered with ecommerce giant Shopee to roll out its YouTube Shopping platform in Indonesia, fuelling direct competition against TikTok’s online seller Tokopedia.

YouTube Shopping will enable YouTube users to purchase products viewed on the video platform by clicking on links to Shopee, a Singaporean multinational e-commerce specialist currently owned by Southeast Asian technology conglomerate Sea Ltd.

Company executives at YouTube told Reuters the service will be expanded to Thailand and Vietnam in a few weeks, as the social media giant seeks to further expand its presence in Southern Asia.

With the partnership, YouTube continues to enhance its digital growth ambitions in Southern Asia in a move that will see the giant directly compete with TikTok after the latter further increased its control in the region with the acquisition of Indonesia’s biggest e-commerce platform Tokopedia.

YouTube Asia-Pacific director Ajay Vidyasagar said that the partnership with Shopee was driven by Indonesia’s "energy and velocity around online shopping.”

He added YouTube Shopping will be expanding to partners other than Shopee "in a phased, sequenced manner.” The director declined to comment on the size of the partnership and only confirmed it was “significant.”

TikTok Shop, an e-commerce feature of the video hosting service TikTok officially launched in September 2023, re-entered the Indonesian e-commerce market by acquiring a controlling stake of 75.1 per cent of Tokopedia in April 2024 for around 781 million euros. With the acquisition, the Chinese video-sharing platform announced further cash injections in the company of approximately $1.5 billion.

With the deal, the company’s minority shares remained in the hands of Indonesian technology firm GoTo, the country’s “largest digital ecosystem” that provides transport, e-commerce, fulfilment, logistics, financial as well as food and grocery-delivery services to both businesses and consumers.

With the merger, TikTok managed to resume its operations in Indonesia after it was shut down due to a law that forbade online shopping on social media platforms.

TikTok’s shopping service, TikTok Shop, recorded $16.3 billion in 2023 in terms of gross merchandise value in South-East Asia, an increase of almost four times the previous year, consultancy firm Momentum Works confirmed in a report. The sales growth confirmed the shopping platform ranked second in terms of presence in the region, after Shopee.

YouTube was planning to apply for a licence to operate e-commerce services in Indonesia, Southeast Asia’s largest economy, according to a report from Reuters.

The region of nearly 700 million represents one of the world’s fastest-growing e-commerce markets. The Momentum Works report highlighted Southeast Asia’s eight largest e-commerce platforms racked up $114.6 billion in gross merchandise value in 2023, an increase of up to 15 per cent compared to 2022.

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