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    TikTok Opens Shop — and Opportunities for Retailers in Southeast Asia

    TikTok's partnership with Shopify enabled brands to market directly on TikTok through their Shopify dashboard.

    By Sega Cheng - Mar 17, 2021
    TikTok Opens Shop — and Opportunities for Retailers in Southeast Asia

    Image by Kon Karampelas from Pixabay

    It’s been a tough year for retail – but also one of the most exciting. Where brick and mortar doors have closed, the proliferation of online stores has opened windows of opportunity for businesses of all sizes. While the pressure is on for retailers to keep pace with these developments, recent trends in the market are shaping the complex online marketplace and laying out the best way for them to move forward.

    Recently, that window of opportunity came via video-sharing app TikTok’s global partnership with eCommerce platform Shopify, which will allow over one million merchants to create and run TikTok marketing campaigns directly from the Shopify dashboard.

    Crucially, the move is a significant milestone in the rise of social commerce, which surpassed expectations in the first half of 2020 alone. A recent iKala study found that orders via social media more than doubled, while gross merchandise value jumped three-fold in Southeast Asia. Put simply, this means that people are not only shopping more on social platforms—they are shopping for more, too.

     
     

    Appealing to a largely untapped demographic

    For retailers seeking a bigger piece of this market, the new announcement from TikTok is even more significant because the platform has amassed some 800 million active users in just four years — and is the most downloaded app in Southeast Asia.

    Its core users (41%) are aged between 16 and 24, a largely untapped user base that Shopify merchants now have easy access to. The majority of TikTok users in Southeast Asia are also female, an important demographic for social selling according to the iKala study that found women between 25-34 of age were the top social media shoppers in Thailand, Vietnam, and the Philippines, and those between 35-44 were more likely to shop on social media in Singapore.

    Yet, appealing to this demographic isn’t simplistic, and requires a robust strategy, some progressive thinking, and experimenting with a growing array of social technologies.

     
     

    Stories will soon be the only format that matters

    First seen on Snapchat, Stories is an immersive visual storytelling media format that is growing 15x faster than feed-based sharing. Adding to this, visual content usage is booming, catering to the short attention spans and smartphone-inclined habits of GenZers.

    The shift to visual mediums has been game-changing for retailers who must now expand their message from a simple headline-body-link format to include backgrounds, overlays, and aesthetics that resonate with viewers, even if they don’t click through.

    TikTok, an app that virtually subsists on visual and story-based sharing, has cemented this trend by offering Shopify merchants video-ad templates that can turn their product into native and engaging commerce content with no prior experience needed.

    Automation is key

    Automation is a word that gets thrown around a lot these days, but for retailers wondering how automation benefits them, they need only take a closer look at Shopify. E-commerce automation has been a core component in Shopify’s rise to a net worth of over $100 billion today and can simplify everything from inventory monitoring and order fulfillment to customer preferences and new product launches.

    The degree of automation available today has enabled small businesses with limited resources to compete with bigger companies and now, as social media becomes further enmeshed with commerce, retailers can also automate their advertising and scale their marketing efforts, just like Shopify merchants can now do with the powerful templates and tools that TikTok has at its disposal.

    A word of caution

    While retailers can learn from TikTok’s successes, they can also learn from its challenges. The app’s association with troubling user data and trust issues bode as a warning to retailers as they double down on social commerce strategies.

    Data and user privacy discussions are on the rise, with iKala’s study finding that trust, fraud and a lack of familiarity were the biggest big barriers for digital consumers in Southeast Asia. It is for this reason that despite an increasing influx of e-wallets in Southeast Asia, cash-on-delivery remains the most popular payment method in the region.

    Retailers who aim to build long-term digital success must then work towards understanding how they can better use 1st party data, address the differing needs of their users and base their targeting and payment strategies around it. Thinking through these foundational blocks will provide a North Star of authenticity and user-centricity for retailers as they navigate the social commerce landscape where users, quite literally, are watching their every move.

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