Since the beginning of March, TikTok Shop has added new sites in Thailand, Vietnam, and Malaysia, and now it is allowing sellers to settle in, which speaks volumes about the significance of TikTok E-commerce in the Southeast Asia region. As of today, Southeast Asia occupies 4 out of the 6 TikTok sites in the world. Chinese service providers rushed in for the first time, and the commercialization of TikTok has further progressed.

1. Overview of TikTok shop market 

Since 2019, Douyin has been trying to sell products via live broadcast. Presently, the domestic live broadcast e-commerce market is dominated by Taobao, Douyin, and Kuaishou. In the international market, TikTok, the international version of Douyin, has developed more slowly, and sites won't be available in Indonesia and the United Kingdom until early 2021.

Taking only the UK and Indonesian markets into account, 36Kr predicted that TikTok's GMV (gross merchandise volume) in 2021 will reach about 6 billion yuan. As of 2020, Douyin's GMV has exceeded 500 billion yuan, and the turnover on overseas markets is about a tenth of the Chinese market.

2. Chinese service providers are poised for success

By adding these three new sites, Chinese cross-border sellers will be encouraged to follow up. Despite having mastered the traditional cross-border e-commerce model, Chinese cross-border sellers are also newbies, and since overseas markets have not yet developed the habit of live-streaming shopping, the sooner they start, the more opportunities they will have.

The company was started by Yang Kan, who has many years of experience in overseas marketing. Nano Power was first established in 2019 as an influencer marketing company for TikTok. Among the three lists of TikTok Shop in the UK, Nano Power has been ranked in the top ten by February of this year.

In order for TikTok to become a hit in Southeast Asia, Yang believes that the first step is to attract traffic at low prices and attract consumption through 3C, daily necessities, and other affordable commodities. As well as platform merchants, TikTok prepares its pallets for this part of the goods. TikTok also offers subsidies to consumers, such as free shipping.

"It is still in the traffic tilt period, and TikTok is also willing to actively push traffic (to the anchor)." Yang Kan said.

Nano Power mainly works with overseas waist influencers. Large local MCNs control almost all of the top influencers, who have great bargaining power. Conversely, waist influencers tend to be inexpensive and have a high level of cooperation. SheIn is the last company to successfully use waist influencers in marketing. As of now, Southeast Asia's market is still enjoying traffic dividends. By using waist influencers, higher returns can be obtained with less investment.

Nancy, an investor who has been following cross-border markets for a long time, told Jiemian News that when Chinese brands go overseas, traditional marketing strategies such as advertising placement and platform placement can no longer connect them with local consumers, and brand overseas service providers play an important role as intermediaries. China has been able to develop a complete method of delivering goods overseas due to Douyin's delivery system. "I believe that in three to five years, looking at the Southeast Asian market will be like going back in time to China a few years ago."

3. What is the potential of e-commerce in the three countries of Southeast Asia?

"It is impossible to find a place on earth that can match Southeast Asia's digital acceptance. The residents of this area with more than 600 million people have one thing in common: they are all eager to access the internet.” Bain Consulting wrote a research report.

The newly opened Thailand, Malaysia, and Vietnam can offer how many opportunities?

As shown by the report "e-Conomy SEA 2021" released jointly by Google and other institutions, Southeast Asians feel more comfortable using the Internet since the epidemic. By 2021, the Internet penetration rate in the region will reach 75%, and 80% of these users will have consumed online at least once.

Specifically, in 2021, the GMV of the Internet economy in Malaysia, Thailand, and Vietnam will be US$21 billion, US$30 billion, and US$21 billion, respectively, an increase of 47%, 51%, and 31% year-on-year. GMV statistics include e-commerce, online travel, transportation, food, and online media, with e-commerce accounts making up the majority.

Compared to Chinese e-commerce, a country's GMV of 20 billion US dollars a year is indeed insignificant - Taobao Live's GMV will reach close to 80 billion US dollars in 2021, but this also indicates the potential of Southeast Asia's e-commerce market. The aforementioned report also predicts that the GMV of the six Southeast Asian countries will reach US$361 billion by 2025 and US$1 trillion by 2030.

As shown by numerous research institutions, TikTok is becoming the most commonly used software for netizens in Southeast Asia, just as Facebook, Instagram, and other social media are. This shows how influential TikTok is in the region. Despite Southeast Asia's young population structure and heavy reliance on social networks, its average consumer spending power is not high. As a result, e-commerce platforms, such as TikTok, specialize in cost-effective competition, and cheap headphones, toys, clothing, and other items are in great demand. According to industry insiders, the main consumer groups in Southeast Asia in a few years will be young netizens aged 20-30.

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Source: www.dsb.cn