Alphabet Inc's YouTube and e-commerce platform Shopee said on Wednesday they were launching an online shopping service in Indonesia and planned to expand it in Southeast Asia as competition picks up with a rival operator owned by TikTok.

Sea Ltd shares continued to rise 4.11% on Thursday after a 2.6% rise last trading day.

Under the YouTube Shopping tie-up, people will be able to purchase goods viewed on YouTube through links to Shopee, which is owned by Southeast Asian technology conglomerate Sea Ltd. Company executives told reporters they plan to expand the service to Thailand and in Vietnam in a few weeks. YouTube Shopping is already active in South Korea and the United States.

Indonesia's "energy and velocity around online shopping" is what prompted the launch, YouTube Asia-Pacific director Ajay Vidyasagar said in Jakarta. With YouTube Shopping, Alphabet Inc and Shopee will be competing against TikTok, the Bytedance-owned video app, which has increased its ambitions for the region after taking control of Indonesia's biggest e-commerce platform Tokopedia.

Asked about the size of the partnership with Shopee, Vidyasagar said it was very significant, but declined to give numbers. He said YouTube Shopping would be opened to partners other than Shopee "in a phased, sequenced manner." Reuters reported last year, citing sources, that YouTube was planning to apply for a licence to operate e-commerce services in Indonesia, Southeast Asia's largest economy.

TikTok's shopping service, TikTok Shop, accounted for $16.3 billion in 2023 in gross merchandise value in Southeast Asia, in a nearly fourfold jump from the previous year, consultancy Momentum Works said in a report.

This has made the platform the region's second largest e-commerce platform after Shopee.

The region of nearly 700 million is one of the world's fastest growing e-commerce markets. The Momentum Works report said Southeast Asia's eight largest e-commerce platforms racked up $114.6 billion in gross merchandise value in 2023, up 15% from 2022.