Bytedance launches cross-border business in Southeast Asia with traffic

Bytedance launches cross-border business in Southeast Asia with traffic

With a huge demographic dividend and an Internet penetration rate of over 50%, TikTok Shop is once again entering the Southeast Asian e-commerce market.

 

TikTok Shop adds four new sites to tap into Southeast Asian market

 

Following the launch of Indonesian and UK stores in February and April 2021, TikTok Shop has made new moves. According to its official announcement, TikTok Shop will launch cross-border business in four Southeast Asian countries (Thailand, Vietnam, Malaysia, and the Philippines) on April 25.


 

It is understood that TikTok Shop is an e-commerce model launched by ByteDance. In countries and regions where TikTok Shop has been launched, consumers can conduct one-stop shopping on TikTok, whether through live broadcasts or short videos. Sellers do not need to open stores on third-party platforms . TikTok hopes to reduce the order loss rate of sellers through TikTok Shop .

 

According to TikTok Shop's official documents, on the day the cross-border business was launched (April 25) , the platform supported merchants to settle in and send products. On April 30, it supported merchants to start broadcasting, send short video trailers, fulfill transactions, and reverse only refunds. In addition, the platform is expected to launch a new "Global Selling: Cross-border Merchants Sell Goods Globally" function in early May.

 

Relying on the platform's own traffic, unlike traditional cross-border e-commerce platforms such as Amazon that obtain traffic through search, TikTok Shop mainly obtains traffic through short videos and live broadcasts to attract customers to place orders. According to the sales characteristics of short videos and live broadcasts, low-priced and novel products are more likely to catch consumers' attention.

 

It is understood that in the initial stage of launch, the platform will guide qualified merchants to settle in through a "targeted invitation model". Merchants need an invitation code to complete the settlement. Only one invitation code is needed to open cross-border business in four new countries.

 

For cross-border merchants who have already settled in TikTok Shop’s UK store, there is no need to settle in again. After the new market is opened, they can directly upgrade their account in the background to become a multinational store and start business in new markets!

 

As the main traffic source platform for TikTok Shop, TikTok has been downloaded over 3 billion times worldwide and has over 1 billion monthly active users. In Southeast Asia, Indonesia has about 75 million active users, currently the largest in Southeast Asia; Malaysia has 11.6 million monthly active users, currently the second largest in Southeast Asia.

 

Judging from the seven sites where TikTok Shop is currently online, five sites (Indonesia, Thailand, Vietnam, Malaysia, and the Philippines) are located in Southeast Asia . The bet on this region also shows the huge potential of the Southeast Asian e-commerce market.

 

E-commerce penetration rate is low, and the Southeast Asian market has great potential

 

Industry data shows that the Internet penetration rate in Southeast Asia (excluding Singapore) is over 50%, but the retail e-commerce penetration rate is less than 5%. Compared with mature e-commerce markets such as China (24.9%) and the United Kingdom (19.3%), the scale of Southeast Asia's e-commerce market still has the potential to grow several times.

 

According to the "2021 Southeast Asia Internet Economy Report" jointly released by Google, Temasek and Bain & Company , e-commerce is the biggest growth driver of the Southeast Asian Internet economy. 80% of Internet users have shopped online. From 2020 to 2021, the Internet economy GMV of six countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, achieved double-digit growth.

 

According to eMarketer , Southeast Asia's e-commerce market will grow by more than 20% in 2022, with total sales reaching US$89.67 billion, an increase of US$15.31 billion from last year. By next year, the region will break the US$100 billion mark, a very optimistic increase compared to US$37.22 billion in 2019.

 

Five countries in the region – the Philippines, Indonesia, Vietnam, Malaysia and Thailand – will rank among the top 10 countries for retail e-commerce sales growth.


 

Due to the impact of the epidemic, war and other factors, the growth of the European and American e-commerce markets this year has been relatively mild, which further highlights the rapid development of the Southeast Asian e-commerce market. The growth rate of 20.6% will firmly take the top spot in the global e-commerce market growth.

 

Among them, the two most outstanding countries are the Philippines and Indonesia, with growth rates of 25.9% and 23.0% respectively.

 

In addition to the rapid growth rate, e-commerce in the region will gradually develop to a more mature stage.

 

According to Research   And   According to the latest report released by Markets, as Southeast Asia's e-commerce business matures, consumers in the region have greatly increased their trust in online shopping, no longer limited to low-priced products, and have begun to buy higher-priced products online. For platform merchants, the profits of high-priced products will be more substantial.

 

At the same time, the report said that in recent years, due to the gradual increase in e-commerce penetration, the demand for storage space has increased, and international retailers are gradually developing warehouses in Southeast Asia to shorten delivery time, increase customer service and product supply. Global companies such as IKEA, Nestle, Tesco, Zalora and Lazada are investing in distribution centers in the region to expand their e-commerce footprint in Southeast Asia .

 

Bytedance is stirring up the Southeast Asian e-commerce market with its traffic

 

Although the Southeast Asian market has great potential, ByteDance is quite cautious. In April 2021, TikTok Shop was launched in the UK, and just two months later, TikTok Shop opened cross-border business in the UK. However, the Indonesian site, which was launched earlier, has not yet opened cross-border business.

 

Previously, a spokesperson for an MCN agency of TikTok said: "TikTok Shop in the Southeast Asian market is open to local merchants. Cross-border stores like the UK market will take some time because the Southeast Asian market is too complicated. "


 

Due to the huge differences in laws, regulations, religious beliefs, economic culture among different countries in Southeast Asia, conducting cross-border business in the region will also be subject to various restrictions.

 

However, in February this year, about a year after the launch of TikTok Shop in Indonesia, domestic and foreign media reported that TikTok was recruiting local e-commerce talents and operators in Vietnam, Thailand and Malaysia, preparing to make a comprehensive layout in the Southeast Asian market. Two months later, TikTok Shop officially announced the launch of cross-border business in Southeast Asia.

 

In addition to relevant information for entry, TikTok Shop also gives sellers suggestions on market and product selection: priority investment markets: Malaysia and Thailand, and increase investment in the Philippines and Vietnam after COD goes online (expected at the end of June); priority investment categories: clothing, shoes and bags, home furnishings, and beauty (please do not distribute goods in large quantities, and give priority to key products).

 

For newly registered accounts, the platform will provide traffic support and official operation guidance. In addition, in order to bring more traffic to cross-border sellers, the platform is expected to launch a new "Global Selling " function in early May , which will enable cross-border merchants to sell their products globally.

 

A senior e-commerce insider pointed out: "In the past few years, the focus of competition in the Southeast Asian e-commerce market has been on Shopee and Lazada . Now, the entry of ByteDance may bring about huge changes. " Lazada focuses on highlighting brands, while Shopee starts from small towns and rural markets, suitable for small and medium-sized sellers. TikTok's advantage lies in traffic. The platform has 240 million monthly active users in Southeast Asia.

 

The huge development potential of the Southeast Asian market and TikTok's large number of active users in the region provide a broad operating space for cross-border merchants.


TikTok

Southeast Asia

Cross-border e-commerce

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