South-east Asian merchants scramble as TikTok ban in US looms, shifting focus back to Amazon, Etsy

[HO CHI MINH CITY] South-east Asian cross-border sellers to the US, hoping to replicate the success of their Chinese counterparts, are facing setbacks as the looming TikTok ban pushes them back to less-profitable e-commerce platforms such as Amazon and Etsy.

Despite TikTok’s potential with 170 million American users, these merchants are now scrambling to adjust, after building their TikTok Shop operations as a critical sales and marketing channel to expand their US presence.

The threat of a looming TikTok ban in the world’s largest consumer market is forcing these sellers to return to traditional e-commerce giants, where lower margins and a less supportive ecosystem are already challenging growth prospects, industry players indicated.

Bui Manh Linh, who has been selling made-in-Vietnam handicrafts on TikTok Shop US for nearly a year, said his company is proactively diversifying to other platforms such as Amazon and Etsy. He is also building his own website.

“But they can’t hold a candle to TikTok Shop. There are fewer opportunities for new sellers to compete with established ones on those traditional e-commerce platforms,” said Linh, who is also chief executive at Tikhub, a multi-channel network which incubates and supports brand affiliates on TikTok.

Before the brief TikTok disruption on Jan 19, Vietnam-based wooden product manufacturer Crosify was planning to launch its US store on TikTok Shop and set up a separate team dedicated to operations on the platform, including product listing, new offering development, video-making and advertising.

“Now we can’t help but slip back to our old ways,” said Crosify co-founder Dong Duc Thanh, referring to his company’s existing presence on Amazon and Etsy.

Given that he had planned to generate only about 10 per cent of Crosify’s US sales this year through TikTok, he didn’t anticipate an immediate impact from the ban and expected the risk of the app disappearing entirely to be low.

However, he now admits that TikTok’s shutdown could impact sales and growth in the long run.

This is due to TikTok’s younger user base, with Gen Zs and millennials accounting for more than 85 per cent of active adult users globally – aligning perfectly with Crosify’s target audience of young parents purchasing toys under its flagship brand, Kalotoys.

Thanh added that TikTok is able to foster more efficient communication of product messages to consumers. In Vietnam alone, the short-video app is contributing about 60 per cent of Crosify’s revenue on its home turf.

TikTok’s global popularity has extensively familiarised sellers with a new way of promoting their products online with video commerce, experts said.

The endless stream of short videos, tailored to individual preferences by powerful algorithms, keeps users entertained and informed passively, without their needing to search actively for content.  

This model, combined with e-commerce features to link products to videos and facilitate livestreaming shopping, pushes demand and stimulates impulse buying, as well as enhances brand engagement with customers.

“We often do not need to invest much, but can still obtain good results via TikTok Shop, which is offering a lot of incentives to support sellers,” said Linh, referring to the app’s generous discount vouchers for buyers and shipping fee subsidies, which enhance his product’s competitiveness by offering more attractive pricing.

Within just a few years of entering the South-east Asian market, TikTok Shop has become the second-largest e-commerce player in the region, especially after the merger with Indonesia’s Tokopedia last year.

In 2023, the gross merchandise value (GMV) of the platform in South-east Asia almost quadrupled from the preceding year to US$16.3 billion – putting it on the same scale as Lazada and Tokopedia, based on a report provided by Singapore-headquartered market insight provider Momentum Works.

In the US, TikTok Shop has built a meaningful presence since its September 2023 launch. It generated about US$9 billion in GMV in 2024, with close to 400,000 stores, Momentum Works’ separate report released on Jan 27 showed.

Ecosystem gaps

Li Jianggan, chief executive at Momentum Works, said sales from South-east Asian sellers to the US are currently insignificant due to the lack of a supporting ecosystem.

“Unlike their counterparts in China, South-east Asian sellers lack access to essential information and cross-border services,” he noted, pointing to services such as warehousing, logistics, tax and compliance.

For example, Crosify’s Thanh noted that Amazon and Etsy are offering sellers “quite expensive” cross-border logistics services provided by several third-party partners.

His company at first faced difficulties when sourcing for local partners to optimise shipping costs when fulfilling its US orders a year back. 

The Vietnamese seller eventually went ahead with plans to launch its first US-based factory this February. The facility will be a warehouse and a manufacturing plant for some customised parts of its products.

With that in place, its delivery time for US orders will be significantly shortened. Crosify is now eager to expand its US footprint to other platforms in the coming period.  

“Our products require multichannel selling on different platforms to secure our presence and increase diversity,” Thanh added. He is also trying out Google Shopping and YouTube Shopping. 

“But compared to other platforms, TikTok Shop is still more popular among our target customers. It also brings about the highest profit margins,” he said.

Room for growth

As uncertainty over the US TikTok ban persists, South-east Asian sellers may find reason to be optimistic about US President Donald Trump’s proposed 10 per cent tariff on Chinese imports, set to take effect in February, because the US leader’s move could shift trade dynamics in their favour.

For Thanh, this shift presents a unique opportunity to strengthen his company’s competitive edge against Chinese rivals on traditional US e-commerce platforms. “Even without TikTok, I’m confident there’s significant room for our brand to grow on Amazon and Etsy over the next five to seven years.”

Amazon noted in its annual report filing with the US Securities and Exchange Commission last year that factors such as regulatory and trade restrictions and geopolitical events, which could hit China-based sellers and suppliers, could adversely affect its operating results.

The platform acknowledged that China-based sellers and suppliers accounted for “significant portions” of its third-party seller services and advertising revenues, as well as its components and finished goods.

Based on Marketplace Pulse research last year, China-based sellers represented nearly half of the top 10,000 sellers on Amazon in the US. 

“Compared to Chinese sellers, South-east Asian sellers are not yet tapping into Amazon effectively. There is huge potential there,” Momentum Works’ Li pointed out.