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IN FOCUS

• Why TikTok Shop veered off Shopee's logistics track in Indonesia
• From our archives: How Batam is striving to become Southeast Asia's next data center hub
• Why Shein is planning payouts for late-stage investors before IPO

Hello reader,

TikTok Shop and Shopee have often moved in lockstep across Southeast Asia. But in Indonesia, TikTok Shop has made a deliberate choice to diverge from Shopee's strategy.

Shopee built SPX during the pandemic, when ecommerce demand was booming and capital was still abundant. Today, though, the economics of building logistics infrastructure look far less attractive.

That appears to be the challenge TikTok Shop is facing in Indonesia. Despite acquiring GoTo Logistics' assets in 2024, TikTok Shop has refrained from making major investments in the logistics business and instead shut down its fulfillment services last year.

In today's Top Story, I examine why TikTok Shop has been reluctant to build its own in-house logistics network in the country. Timing is only part of the story. Regulatory uncertainty and shifting policy in Indonesia may also have made the company think twice about committing billions to long-term logistics infrastructure.

What's striking is that scale doesn't appear to be the problem. TikTok Shop already commands the second-largest ecommerce market share in the country after Shopee, giving it enough volume to justify building its own network. Yet it has chosen a different path.

Jofie Yordan, journalist

TOP STORY

Behind TikTok Shop's logistics gamble in Indonesia

TikTok Shop's decision to scrap its fulfillment operation in Indonesia means the company will continue to rely on J&T Express for most of its deliveries. This prevents the social commerce platform from having greater control over its delivery service quality and margins.

Given the current macroeconomic environment and rising costs, building logistics infrastructure may not be the most strategic move for TikTok Shop. The bigger question is whether relying on J&T Express will remain a viable long-term game plan as the platform continues to scale.

FROM OUR ARCHIVES

Batam's data center boom is just getting started, with caveats

A recent Bloomberg report suggests that Malaysia remains a major destination for chip and data center projects in Southeast Asia, even as emerging locations like Batam have recently started attracting companies' attention.

In April, I wrote about Batam's ambitions to become the region's next data center hub. Unlike Malaysia, however, Batam is more focused on data center infrastructure than AI hardware manufacturing. Many data centers are still under construction on the island, which sits just 45 kilometers from Singapore.

Batam is hoping to benefit from spillover demand as Singapore runs out of room for new data centers and Malaysia grapples with higher water tariffs and tighter regulations.

Even so, Malaysia retains a significant edge. The country is one of the world's four largest net exporters of AI-related hardware and has spent decades building a semiconductor ecosystem spanning chip packaging, assembly, and testing. That established supply chain, combined with its larger data center footprint, continues to make Malaysia Southeast Asia's strongest AI infrastructure hub despite growing competition from Batam.

TRENDING NEWS

1️⃣ Shein weighs payouts before $40b Hong Kong IPO

The fast-fashion giant is weighing cash payments and additional Class B shares for some late-stage investors. The proposal would apply to investors in Shein's series pre-D, D, and D+ rounds who bought in at valuations of up to US$64 billion.

2️⃣ AI ad startup Reforged Labs winds down after 3 years

Co-founder and CEO Robert Huynh said the Singapore-based company would not reach the scale it had raised capital to achieve. Reforged Labs built AI creative tools for mobile game marketers with teams in Vietnam and the US.

3️⃣ Alibaba rolls out Qwen3.8-Max AI model globally

The launch comes ahead of an open-weights release slated for next week as Chinese developers push further into coding agents and multimodal systems. The AI model is designed for long-running agentic tasks and activates 95 billion parameters during inference, according to Alibaba.

4️⃣ Singapore fintech body launches payments conduct code

The voluntary code sets standards for payment service providers on pricing, marketing, fraud prevention, data privacy and security, and operational resilience. It applies to holders of major payment institutions, standard payment institutions, and money-changing licenses.

5️⃣ Australian fintech firm Eftsure expands to Singapore

The company offers tools that help finance teams verify payment details before sending funds and monitor changes in vendor data across domestic and cross-border payments. The expansion comes amid Singapore's cybercrime and scam losses hitting S$913.1 million (US$711 million) in 2025.

OUR AI AND AD PILOTS MADE $0

Here's how we're moving to prevent this.

Earlier this year, we were painfully honest about how our own ad campaigns and AI outbound experiments yielded zero revenue. It turns out we're not the only ones bleeding budget with our experiments. McKinsey and EDB's joint report in February found that while over 60% of companies are pouring massive budgets into AI, nearly 1 in 5 are seeing absolutely zero impact on their bottom line.

Being stuck in executing and testing AI experiments is a fast track to burn budgets. To bridge this execution gap, we realized that there's a need to master a two-track reality: understanding the macro track (policy and infrastructure) and executing on the micro track (operationalization and scalability).

Click here to learn why the era of isolated experimentation is dead, and how you can leverage a two-track strategic framework to turn your AI investments into tangible revenue.

PRESS PEEKS

The following press releases were published as they were received, without any editing from the Tech in Asia team. You, too, can publish your own press release on our site by simply filling out this form. Our team will get back to you by the next business day.

• AutomationSG - Nodeflux Announces Global Expansion Initiative, Unveiling ATHENA Enterprise AI in 2025 and SAR Satellite Analytics in 2026: AI pioneer Nodeflux expands globally, launching ATHENA Sovereign AI in 2025 and a SAR Satellite Image Analysis platform in 2026.
• ADA - ADA acquires Algonomy, strengthening its intelligent growth platform for a fully agentic experience: ADA acquires Algonomy, expanding its AI capabilities to deliver intelligent, agentic customer experiences at scale.
• Nodeflux - AutomationSG launches TIA-Ready Framework for trusted industrial artificial intelligence: An industry-led readiness and recognition pathway to support responsible adoption of AI in automation and robotics.

EVENTS HAPPENING

In conversation with Google DeepMind's JJ Geewax JJ Geewax, director of applied AI at Google DeepMind, understands that even the most advanced models are only as good as the infrastructure they run on. Having spent 15 years designing massive-scale systems at WhatsApp, Meta, and Google, JJ brings a deep practitioner's perspective to the brutal challenges of real-world deployment. Secure your access here.

WHO'S HIRING

You can post a job here or search for jobs here.

• Marketing Manager (EduTech) at Cakap | Tangerang, Indonesia
• IT Governance, Risk, and Compliance (GRC) at PT. ASLI Rancangan Indonesia | Jakarta, Indonesia
• Digital Marketing Specialist at Boleh Dicoba Digital | Bandung, Java, Indonesia