The e-commerce industry is facing increasing competition as the primary choice for people to engage in buying and selling transactions. Some brands have even opted to sell their products directly on their own websites.

Recently, Meta's CEO, Mark Zuckerberg, announced that its subsidiary, WhatsApp Business, has reached 200 million active users. This number has quadrupled compared to three years ago. WhatsApp Business is a feature within the WhatsApp messaging app specifically designed for Small and Medium-sized Enterprises (SMEs) to facilitate online buying and selling transactions between buyers and sellers.

Meta seems to be directing the development of WhatsApp as a business platform to generate more revenue. This move follows economic uncertainties that have significantly impacted Meta's overall advertising business ecosystem, as reported by Reuters on Wednesday, June 28, 2023.Notably, Meta has launched two new features for WhatsApp Business that further simplify the process for SMEs. In Indonesia, these features are already available for a select group of SMEs during the testing phase.

Firstly, there's ad synchronization from WhatsApp to Facebook or Instagram. Users only need a WhatsApp Business account and don't have to switch applications to create their ads. When users on Facebook and Instagram click the ads, they are directly redirected to the seller's WhatsApp. They can ask questions, browse products, and make purchases.

This feature will gradually become available to WhatsApp Business users. Some SMEs already have access to advertising on Meta's platforms. Secondly, there's the introduction of paid messages. This feature allows sellers to send personalized messages to customers, including the customer's name and scheduled message delivery.

"We hope these features can support SMEs to progress further. Existing and free technologies will attract more users while retaining existing ones," said Pieter Lydian, Country Director of Meta Indonesia, during an interview in Jakarta on Tuesday, June 27th.WhatsApp's aggressive strategy in developing business features appears to align with TikTok's Shop feature. Both services, which originated as messaging apps and social media platforms, have advantages in terms of audience engagement.

WhatsApp and TikTok are both platforms accessed frequently by internet users on a daily basis. WhatsApp boasts 2 billion monthly active users globally, while TikTok is used by 1.6 billion people worldwide each month. The dependence of internet users on these platforms makes online buying and selling transactions easier within the apps. This trend poses a potential threat to e-commerce players like Shopee, Tokopedia, and Lazada. These e-commerce platforms, which were established primarily for buying and selling, now have to strategize to prevent users from switching their shopping activities to TikTok Shop and WhatsApp Business.

As a reference, TikTok Shop's Gross Merchandise Value (GMV) in Indonesia amounted to $2.5 billion last year, according to a Financial Times report. This figure contributed to the majority of the total GMV in Southeast Asia, amounting to $4.4 billion. This year, TikTok Shop is targeting growth in Indonesia to more than double, reaching around $5 billion (IDR 75 trillion). This information comes from two reliable sources familiar with the issue.

It's no surprise that TikTok specifically targets Indonesia. Research firm Insider Intelligence stated that active TikTok users in Southeast Asia reached 135 million by Q1 2023. Indonesia is the largest contributor to this user base with 113 million users. The potential of TikTok Shop cannot be underestimated by established e-commerce players like Shopee, Tokopedia, and Lazada. Despite being introduced in Southeast Asia only in 2021, TikTok Shop's survey by research firm Cube Asia shows that user spending on TikTok Shop has led to reduced spending on Shopee and Lazada.

In Indonesia, Thailand, and the Philippines, user spending on Shopee decreased by 51% due to the shift to TikTok Shop. Meanwhile, spending on Lazada decreased by 45%, and offline store spending plummeted by 38%. However, Shopee's GMV is still significantly higher than TikTok Shop's. Throughout 2022, Shopee's GMV in Southeast Asia reached $73.5 billion, while Lazada garnered a GMV of $21 billion.