CARI Captures Issue 663: TikTok Shop’s gross merchandise volume rises to US$16.3 billion in 2023

ASEAN
TikTok Shop’s gross merchandise volume rises to US$16.3 billion in 2023
(16 July 2024) TikTok has significantly increased its presence in Southeast Asia’s e-commerce market. TikTok Shop’s gross merchandise volume (GMV) rose nearly fourfold from US$4.4 billion in 2022 to US$16.3 billion in 2023, making it the fastest-growing e-commerce platform in the region. The platform, combined with Tokopedia, now holds a 28.4% market share, surpassing Lazada and becoming the second-largest player in the ASEAN region. The total e-commerce GMV in the region reached US$114.6 billion in 2023. Shopee remains the market leader with a 48% share. TikTok has invested heavily in Southeast Asia, expanding its workforce to over 8,000 by 2023 and leveraging its livestreaming feature to drive sales. In Indonesia, despite a temporary ban on social media transactions, TikTok took a 75% stake in Tokopedia, achieving a 39% market share. In Vietnam, TikTok Shop holds a 24% market share.

MALAYSIA
Malaysia to decide high-speed railway project with Singapore by year-end
(18 July 2024) Malaysia is evaluating proposals for a high-speed rail link between Kuala Lumpur and Singapore, with a decision expected by the end of Q4. The government has shortlisted three out of seven consortiums: YTL Corp., Berjaya Land Bhd, and China Railway Construction Corporation. The project, initially approved in 2013 and later scrapped, is estimated to cost up to MYR 100 billion (US$21.4 billion) but could be lower based on the proposals. The rail line aims to reduce travel time to 90 minutes. Malaysia’s Transport Minister noted the government is reluctant to guarantee the project to avoid increasing debt but is open to incentivising the private sector. Additionally, Malaysia plans to complete its China-built east-west coast rail line by the end of 2026 and is discussing linking this network with Thailand’s rail system, aiming for broader Southeast Asia-China connectivity.

INDONESIA
Japanese automakers pushes hybrids amidst rising competition from Chinese EV brands
(17 July 2024) Japanese automakers Toyota and Nissan are highlighting their latest hybrid electric vehicles at the Gaikindo Indonesia International Auto Show, amid rising competition from Chinese EV brands. Toyota introduced new Prius hybrids, priced at around IDR 698 million (US$43,255), while Nissan unveiled the hybrid e-Power Serena for IDR 640 million. Japanese automakers currently dominate over 90% of Indonesia’s market, with Toyota holding more than 50% of sales in early 2024. However, Chinese brands like BYD are making inroads, showcasing models priced between IDR 365 million and IDR 465 million. The Indonesian government is pushing for a shift to EVs to achieve net-zero emissions by 2060, leveraging its nickel reserves. Despite this, limited charging infrastructure and high EV prices deter consumers, making hybrids a popular choice.

INDONESIA, THE PHILIPPINES
Filipino bonds widen lead over Indonesian bonds as rate cuts loom
(18 July 2024) The prospect of an interest-rate cut in the Philippines is boosting the nation’s bonds, outperforming Indonesia’s. The yield on the benchmark 10-year Philippine bond has declined since May 2024, while Indonesia’s has remained high, widening the gap to the most since September 2022. Bangko Sentral ng Pilipinas (BSP) may cut rates as early as August, driven by inflation falling below 4%. In contrast, concerns about Indonesia’s fiscal deficit and currency are affecting bond performance, despite yields above 6%. Indonesian debt is weighed down by potential increased spending and possible removal of a deficit ceiling under President-elect Prabowo Subianto. Philippine bonds are expected to yield 2.5% in July, leading Asia, compared to Indonesia’s 1.7%. Bank Indonesia kept its key rate unchanged on 17 July, with possible rate cuts later in 2024. Analysts expect the yield spread between the Philippines and Indonesian bonds to persist through year-end.

SINGAPORE
Full-year growth projected to be close to potential rate of 2% to 3%
(19 July 2024) Singapore’s full-year economic growth is projected to be close to its potential rate of 2% to 3%, with core inflation expected to ease significantly in Q4, according to the Monetary Authority of Singapore (MAS). The GDP growth forecast is in the upper half of the Trade Ministry’s 1% to 3% range, up from 1.1% in 2023. The MAS reported a net profit of S$3.8 billion (US$2.8 billion) for the 2023/24 financial year. Assets under management in Singapore grew by 10% to S$5.41 trillion in 2023, with significant growth in private markets. The wealth management industry has expanded alongside asset management, despite a recent money laundering case. The MAS will invest an extra S$100 million to support financial institutions in developing quantum and artificial intelligence technologies.

THAILAND
Thailand expands visa-free entry scheme to 93 countries and territories
(17 July 2024) Thailand has expanded its visa-free entry scheme to 93 countries and territories to revitalise its tourism industry, allowing visitors to stay for up to 60 days. Previously, only passport holders from 57 countries could enter without a visa. In the first half of 2024, Thailand recorded 17.5 million foreign tourist arrivals, a 35% increase from the same period in 2023 but still below pre-COVID-19 levels. Most visitors were from China, Malaysia, and India. Tourism revenue for this period was THB 858 billion (US$23.6 billion), less than a quarter of the government’s target. The new visa-free rules are part of a broader plan to boost tourism, which includes a five-year visa for remote workers and a one-year post-graduation visa for students with a bachelor’s degree or higher. Authorities also extended a waiver on hoteliers’ operating fees for two years and scrapped a proposed tourism fee. Concerns have been raised about infrastructure capacity and safety, with issues such as air traffic bottlenecks and rumours of tourists being kidnapped to work in scam centres.

VIET NAM
Viet Nam’s economy expanded to expand by 6.3% in 2024 and 6.5% in 2025
(17 July 2024) The Asean+3 Macroeconomic Research Office has forecasted Viet Nam’s economy to grow by 6.3% in 2024 and 6.5% in 2025, with the 2024 growth rate revised up by 0.3 percentage points from April’s forecast. This is the highest projected growth rate among Asean countries for 2024. Chief economist Hoe Ee Khor highlighted that Viet Nam, previously affected by a downturn in external demand, is expected to benefit from a turnaround in 2024. The Asian Development Bank also revised its growth projection for Viet Nam to 6.2%, up from 6% in April. The Ministry of Planning and Investment anticipates even higher growth, forecasting a 7% expansion for the full year, with 7.4% and 7.6% growth in the last two quarters of 2024, respectively. The General Statistics Office reported a 6.93% growth rate for the second quarter and 6.42% for the first six months of 2024.

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AUSTRALIA
Unemployment rate rises to 4.1% in June 2024 from 4% in May
(18 July 2024) Australia’s unemployment rate rose to 4.1% in June 2024, up from 4% in May, as reported by the Australian Bureau of Statistics. The economy added over 50,000 jobs, surpassing the 20,000 forecasted by economists, with full-time positions increasing by 43,300 and part-time positions by 6,800. The participation rate edged up to 66.9%, close to the record 67% set in November 2023. Despite the rise in unemployment, the labour market remains strong, with the federal treasurer noting 930,000 jobs added since May 2022. The Reserve Bank of Australia (RBA) will consider these labour figures along with June quarter inflation data in its August meeting. The likelihood of a 25-basis-point rate hike to 4.6% was assessed at 15% prior to the jobs report. Unemployment increased by 10,000 to 608,000 in June, still 100,000 fewer than pre-Covid-19 levels. A separate NAB survey indicated easing business conditions due to slow economic growth and soft consumer demand.

NEW ZEALAND
Annual inflation rate decreases to 3.3% in Q2 2024 from 4% in Q1
(17 July 2024) New Zealand’s annual inflation rate decreased to 3.3% in Q2 2024 from 4% in Q1. This figure was lower than economists’ expectations of 3.4% and the Reserve Bank of New Zealand’s (RBNZ) forecast of 3.6%. Consumer prices increased by 0.4% from the previous quarter, below the 0.5% estimate. The RBNZ maintained the official cash rate at 5.5% and acknowledged signs of a deepening economic downturn. The central bank expressed confidence that inflation will return to its 1%-3% target range in 2024, leading to speculation about potential interest-rate cuts. Non-tradables inflation, indicating domestic price pressures, slowed to 5.4% from 5.8%, while tradables prices, reflecting global commodities and imports, rose 0.3% year-on-year, down from 1.6%. Housing and household utilities were the largest contributors to annual inflation.

JAPAN
Japan’s exports in June 2024 increase for seventh consecutive month
(18 July 2024) In June, Japan’s exports increased for the seventh consecutive month, reaching JPY 9.2 trillion (US$59.1 billion), a 5.4% rise from a year earlier, driven by semiconductor equipment. Imports also grew for the third month in a row, reaching JPY 8.9 trillion, up 3.2%. The trade balance for the first half of the year showed a deficit of JPY 3.2 trillion, nearly half of last year’s figure. Semiconductor manufacturing equipment exports surged by 37.9%, while nonferrous metals rose 22%. Imports of computers and related products increased by 48.5%, and motors by 37.6%. Exports to the U.S. rose by 11% to JPY 1.9 trillion, and exports to China grew by 7.2%. Overall exports to Asia increased by 7.7%, but exports to the EU declined by 13.4%. Despite the rise in export value, total export volume fell by 6.2%, indicating higher prices rather than increased demand. Import volume dropped by 8.9%. A testing scandal involving major automakers affected exports, but recovery is expected once the issue is resolved. In yen terms, June export prices rose by 10.4%, while import prices increased by 9.5% due to a weaker yen and higher prices for crude oil and metals.

15 participating countries	20 chapters	2.2 billion	US$26.2 trillion	28%
ASEAN member states, Australia, China, Japan, South Korea, New Zealand	trade in goods and services, investment, intellectual property, e-commerce, competition, SMEs, economic and technical cooperation, and government procurement	combined population, 30% world’s population	combined GDP, 30% global GDP	global trade (based on 2019 figures)