How TikTok Shop makes Vietnamese spend 8,460 billion VND a year: Products are everywhere, users buy impulsively even without intention

According to the latest data from market research firm Momentum Works (Singapore), $4.4 billion is the total value of goods that Southeast Asian consumers have spent to buy goods on the TikTok Shop platform in the past year. in 2022. In which, Vietnamese consumers alone contribute 360 ​​million USD (equivalent to 8,460 billion VND), or 23.1 billion VND per day. This number is “not quite” compared to what Shopee (47.9 billion USD in Southeast Asia) and Lazada (20.1 billion USD in all Southeast Asia) achieved, but TikTok Shop is still rated as the “best man”. play” formidable new in the region.

TikTok Shop has now quickly risen and entered the Top 5 e-commerce platforms with the largest GMV in all Southeast Asian markets in which it is present. In Vietnam, TikTok Shop has been in operation since the beginning of 2022, when the e-commerce cake was mostly in the hands of Shopee and Lazada. After more than a year, TikTok Shop has achieved GMV achievement on par with Sendo, nearly catching up with Tiki – a 13-year-old e-commerce platform.

According to a market research company from Singapore, TikTok Shop has achieved a significant level of GMV through live videos and videos. Initially, the platform pushed products to the user’s display screen (feed) through videos, livestreams and promotional videos inserted in the feed. This strategy is known as “product-seeking consumers”, attracting users who originally did not intend to buy but only for entertainment purposes.

The improved version of TikTok Shop now supports and integrates many features (such as product search, flash sale, …) to meet the different shopping needs of consumers, making it similar to more traditional e-commerce platform. However, the difference is that TikTok Shop already has traffic thanks to a large number of people watching TikTok videos.

Besides, TikTok Shop has introduced a separate page for shopping, through the “Shop” tab displayed in the center of the screen. This feature better supports users who intend to shop in searching, discovering and selecting products, also known as the strategy of ” users to search for products” . According to Momentum Works, in the markets where the “Shop” tab was launched, the feature contributed more to orders than a similar feature on Douyin in China.

“The features developed have established a two-way relationship between the two strategies of “product-seeking product” and “user seeking product”, encouraging impulsive buying behavior and, at the same time, creating users’ TikTok product search and shopping habits. This further strengthens TikTok Shop’s position as a major e-commerce platform similar to other platforms in the market ,” said a market research firm from Singapore.

However, Momentum Works also pointed out the difficult position of TikTok Shop in the battle with the big brothers.

Specifically, TikTok Shop is difficult to convince other brands to open stores on its platform. The majority of big brands are still looking at TikTok as a marketing channel. Second, the product results returned on the TikTok Shop are not unique enough, many products can be purchased through other established platforms, often with credit. Meanwhile, users still consider TikTok as a social networking application rather than an e-commerce platform.

Momentum Works commented: “While TikTok Shop offers users a different experience than traditional e-commerce platforms in the region, can the platform build that experience into the mainstay of the company? e-commerce in Southeast Asia, with its mature e-commerce content ecosystem, remains to be seen…

TikTok Shop is still in its infancy with lots of room for improvement. Many of the issues outlined above are only technical, not structural in nature, and could be resolved with more time, operational focus and capital investment.”

TikTok Shop also makes no secret of its ambition. The platform reportedly aims to triple the value of commodity transactions by 2023, to $15 billion.