PETALING JAYA: Malaysia’s digital economy is currently riding mostly on TikTok, but experts warn the country would be dangerously exposed if the platform falters.
With more than 28 million local users spending an average of 39 hours a month on the app, TikTok has overtaken Facebook and YouTube in usage, transforming itself into a marketplace, marketing tool and entertainment hub rolled into one.
Association of Accredited Advertising Agents Malaysia (4As) president Tan Kien Eng said TikTok has positioned itself as an essential tool for small and medium enterprises ( SME).
“For many small businesses and entrepreneurs, it has become nothing short of a lifeline.
“Agencies also now regularly include it as part of their clients’ customer journey,” he said.
But he cautioned against putting all eggs in one basket.
“Micro and small enterprises often concentrate on one platform. But medium and large enterprises cannot depend on only one channel.
“Digital is broad. What is available on conventional media is also available digitally,” he said, adding that businesses must diversify into multiple platforms, including AI-powered tools.
However, he dismissed immediate fears that the ongoing United States-China dispute over TikTok’s ownership and algorithms would hurt Malaysian users.
“Any change to TikTok’s algorithm in America is limited to the American audience only. Therefore, there is no cause for concern here in Malaysia,” he said.
However, industry observers caution that global uncertainty cannot be ignored.
Lawmakers in Washington have pressed TikTok’s Chinese parent company ByteDance to divest its US operations, while India banned the app outright in 2020, and Indonesia briefly blocked TikTok Shop last year.
Vox Group digital lead Dashwini Ravi said TikTok had “collapsed the traditional marketing funnel”.
“Customer journeys that used to take weeks now take hours. Viral moments can convert to sales almost instantly,” she said.
She added that about 60% of her clients use TikTok for brand discovery, while 40% focus heavily on TikTok shop and live-selling.
“Some SME dedicate up to 80% of their digital budgets to TikTok.
“This can create vulnerability to platform shifts. No single channel should exceed 60% of digital spend,” she cautioned
Skribble CEO and Strategic Asia Marketing Alliance president Teng Chan Leong agreed that TikTok’s rise had been striking, describing it as “a very powerful social media and social commerce platform”.
“For most consumer brands, TikTok is a natural priority since it has the most diverse reach and is currently fast growing,” he said.
However, he also said it would be a wise move for SME to focus some of their marketing efforts on other platforms.
“SME are prioritising TikTok, but I don’t think they are overly reliant. Most still distribute their presence on Xiao Hong Shu, Instagram, Facebook and sometimes even LinkedIn.
“Meta and Google still hold a big share of advertising budgets, but the marketing spend is now stretched to include TikTok, affiliates and live-selling,” he said.
Although TikTok’s meteoric rise has made it a launchpad for Malaysian small businesses, experts agree its dominance should be embraced with caution because if the platform stumbles, so could the thousands of entrepreneurs who depend on it.