Live streaming e-commerce supports half of Southeast Asia's e-commerce

Against the backdrop of the rapid development of the digital economy, live streaming e-commerce is becoming an important driving force in the Southeast Asian market. This article analyzes how this emerging sales model is changing consumer shopping habits and opening up new market opportunities for cross-border merchants.

Cross-border goods are sweeping the Southeast Asian market at an unprecedented speed and scale, and live streaming has contributed greatly to this.

This new sales method originated from China not only allows Southeast Asian consumers to more intuitively understand product details and the brand stories behind them, but also breaks geographical restrictions and cognitive barriers, thereby accelerating the circulation of cross-border goods in the local area.

"In Southeast Asia, Chinese beauty products, clothing, electronic products, and household products are all very popular. Even some unexpected categories can be sold well in live broadcasts." Rick, a cross-border e-commerce practitioner who has been deeply involved in Southeast Asia, said, "For example, we originally thought that dried fruits might not have a market in Thailand, where tropical fruits are abundant, but this is not the case. Even seemingly inconspicuous snacks such as spicy strips can quickly become a new favorite of Thai consumers."

This is true. Ebrun Power also learned that in the past two or three years, live streaming has flourished in Southeast Asia, from Thailand to Vietnam, from Malaysia to the Philippines and Singapore, and there are many cases where the GMV of a single live broadcast by top anchors exceeds one million US dollars.

"For example, the live streaming e-commerce market in Thailand has been particularly strong this year." Aaron from a Thai influencer incubation agency said that both the live streaming by influencers and the live streaming by merchants on TikTok Shop Thailand have seen significant growth, at one point setting a record for a single-day GMV that exceeded that of the Indonesian site.

Livestreaming sales in Vietnam is also very popular. According to the Saigon Liberation Daily, Vietnam currently has more than 2.5 million livestreaming sales events per month. Among them, there are often anchors and livestreaming rooms with record-breaking sales. For example, a Vietnamese internet celebrity with a relatively small number of fans attracted as many as 80,000 online viewers in his first livestreaming sales show on TikTok, with a GMV of nearly 3 million yuan. Later, he set a single-game sales record of over 5 million yuan with a peak number of 260,000 online viewers.

It can be seen that live streaming has become a new growth point for platforms and merchants with its unique interactivity and instant feedback mechanism. Especially in the field of cross-border e-commerce, the market activity of live streaming continues to rise, providing an excellent stage for Chinese merchants and cross-border products to enter the Southeast Asian market.

01 Live streaming e-commerce is accelerating in Southeast Asia

Driven by its entertainment and high interactivity, live streaming e-commerce has rapidly risen around the world, especially in Southeast Asia, where it has become a hot spot for development.

Southeast Asia, with its higher than global average internet penetration rate and the online shopping habits accelerated by the pandemic in recent years, is becoming a hot market for live streaming e-commerce, a new e-commerce model. It is predicted that by 2025, the size of Southeast Asia's e-commerce market is expected to reach US$234 billion, with a strong annual compound growth rate of 18%.

In addition, the young population structure in Southeast Asia also provides strong support for the rapid development of live e-commerce. The young population in Indonesia, Malaysia, the Philippines and Vietnam accounts for more than 50% of the population. This group is open to new shopping methods and is willing to spend for their own interests. This series of factors has jointly promoted the booming development of live e-commerce in Southeast Asia.

Take Thailand as an example. Its Internet population penetration rate is as high as over 80%, social media is booming, and the entertainment industry and live broadcast industry are relatively mature. When TikTok Shop, a platform with both social media attributes and a complete e-commerce transaction chain, entered the Thai market, local live broadcast e-commerce quickly ushered in a big explosion. According to the Momentum Works report, in 2022, TikTok Shop, which has been online in Thailand for less than a year, has accounted for about 4% of the overall GMV of Thai e-commerce.

Not only in Thailand, but also in the entire Southeast Asian market, TikTok Shop, as the main promoter of live streaming, is "surging". Public data shows that in 2023, the total e-commerce transaction volume of TikTok Shop in Southeast Asia has reached about 16.3 billion US dollars, an increase of more than 27 times compared with 2021, making it the fastest growing e-commerce platform in Southeast Asia.

The live streaming shopping trend it has led has also swept the entire e-commerce market, becoming the key to changing the platform's competitive landscape: in addition to TikTok Shop, which focuses on live streaming e-commerce, platforms that started out as shelf e-commerce platforms, such as Shopee and Lazada, have also vigorously developed live streaming shopping through in-app functions. On traditional social media platforms such as Facebook and Instagram, users "plant grass" through the live streaming rooms of experts and then "pull out grass" through Whatsapp communities.

Many Southeast Asian cross-border merchants on TikTok Shop sighed: "The platform's vigorous development of live streaming has promoted the rapid development of live streaming e-commerce in Southeast Asia, and has also passed on the bonus effect to the sellers. The most obvious feeling is that the infrastructure has been built, the threshold has been lowered, and the gameplay has been enriched. In more than a year, (we on TikTok Shop) have gone from zero to millions of dollars in monthly sales."

The rapid growth of TikTok Shop in Southeast Asia is inseparable from the rich content ecosystem cultivated locally in Southeast Asia - including strong support for local Internet celebrities and content creators, as well as deep integration into and respect for local Southeast Asian culture.

For example, in terms of live streaming, TikTok Shop encourages anchors to innovate continuously and unlocks more gameplay that conforms to local culture, such as singing and dancing with rap in Thailand and scripted product promotion in Vietnam. For another example, TikTok Shop combines Southeast Asian festivals and promotional nodes to create marketing activities that conform to local consumer preferences, which not only enhances regional identity and affinity, but also further improves the platform's user activity.

In fact, the rapid rise of TikTok Shop in Southeast Asia not only demonstrates the unlimited potential of the live streaming e-commerce model, but also heralds the formation of a diversified ecosystem woven together by platforms, users, influencers and service providers.

02 When the wind rises: the "alliances" of platforms, users, experts and service providers

At the beginning of 2021, TikTok Shop officially debuted in Indonesia. In April of the following year, it was launched in Malaysia, Thailand, Vietnam, and the Philippines at the same time, and in June it entered Singapore. In just two or three years, TikTok Shop has set new records in Southeast Asia at an astonishing growth rate.

Executives of Southeast Asian e-commerce platforms have bluntly responded to the market impact and influence brought by new platforms and new e-commerce models led by TikTok Shop as "powerful opponents from the higher-dimensional world."

Although to some extent, the live streaming e-commerce ecosystem in Southeast Asia is still in its early stages of development, its vitality has attracted many players to rush in like a magnet - an ecosystem that is woven together by a large user group, merchants, experts, service providers and platforms, which is both mutually reinforcing and full of innovative vitality, has begun to take shape.

On the user side, the consumption characteristics of Southeast Asian consumers provide a broad space for the development of live e-commerce. They focus on cost-effectiveness and like to learn about and choose products through social media and word-of-mouth communication. Live e-commerce just meets this demand. Through the real-time display and recommendation of the anchor, consumers can more intuitively understand the quality, performance, and use effect of the product, and the anchor can help answer questions and make more wise purchasing decisions.

According to a survey conducted by local Vietnamese media on user shopping behavior during the 2023 holiday season, as many as 69% of users will watch short videos to search for products and services, while 64% of users said they would "unconsciously" shop while watching live broadcasts. This indirectly shows that the status of live e-commerce in the hearts of Southeast Asian consumers is constantly improving.

On the merchant side, at the "2024 TikTok Shop Southeast Asia Cross-border E-commerce Annual Summit", official data disclosed showed that in 2023, the number of TikTok Shop Southeast Asian cross-border merchants increased by nearly 5 times year-on-year, and the number of moving goods increased by more than 19 times year-on-year.

According to merchants, TikTok Shop's subsidy policies for cross-border merchants, such as commission-free new stores, logistics subsidies, anchor resource docking, and traffic discounts, have also effectively reduced merchants' operating costs, thereby attracting a large number of merchants to settle in.

On the influencer side, entrepreneurial teams and local small and medium-sized enterprises are targeting the new business model of TikTok live streaming and selling goods. They have established large and small institutions and service providers, and vigorously recruited and trained young anchors.

For example, halinhofficial, an anchor under the Vietnamese internet celebrity marketing platform Melive, has more than 4.88 million TikTok fans. She has long maintained a leading position in the field of live streaming sales in Vietnam, and set a record for single live streaming sales in the recent 6.6 e-commerce promotion, jumping to the top of Southeast Asian live streaming rooms on 6.6.

For merchants, the continuous emergence of Southeast Asian anchors has further lowered the threshold for their layout of live e-commerce. For example, a cross-border beauty merchant once pointed out that in Southeast Asia, labor costs, venue equipment, and marketing and promotion costs are relatively low, which also leaves more room for the growth of talent structure and merchants. "The price level of central cities in Southeast Asian countries can be roughly benchmarked against second-tier cities in China, and the rental cost and labor cost are lower than in China. For example, the average monthly salary of amateur anchors in China is about 6,000-7,000 yuan, while the salary of amateur anchors in Indonesia is about 2,000-4,000 yuan." A Southeast Asian live broadcast practitioner also pointed out.

It is worth noting that MCN agencies in the Southeast Asian live e-commerce ecosystem are more inclined to cultivate "full-time anchors" rather than "experts".

The difference between the two is that influencers usually maintain a cooperative relationship with service providers or brands, and agencies have relatively weak control over influencers. Some top influencers even set up their own MCN companies to serve their personal commercial operations. Professional anchors are more controllable. Although they do not have their own IP and traffic, they can provide stable and professional live broadcast services for stores. Therefore, many Southeast Asian MCN agencies and sellers are actively cultivating and operating their own professional anchor teams.

As the service provider ecosystem in Southeast Asia matures, anchors and influencers have a deeper understanding of live streaming sales, including understanding of products, aesthetic resonance, and cultural exchange. Specifically at the national level, live streaming sales in Southeast Asian countries show unique cultural characteristics.

In Thailand, live streaming is not only a way to shop, but also an entertainment experience. The anchors create an immersive shopping atmosphere through interactive methods such as singing, dancing, and games, allowing consumers to complete their shopping while enjoying entertainment. For example, Pimrypie, as a top anchor in Thailand, features a live streaming room that invites multiple guests to create a live streaming atmosphere with dance and music as the theme. A single live streaming easily attracts nearly 200,000 viewers.

Top anchors in Vietnam tend to focus on specific vertical fields, such as fashion and technology, and attract consumers through professional advice and promotions. Philippine anchors like to share their personal experiences and daily life to build trust with the audience. Singaporean anchors are known for their high-quality and professional live content, which has also attracted many high-end brands. Malaysian live broadcast rooms focus more on discounts and promotions to enhance the shopping experience.

03 New opportunities for cross-border merchants in the Southeast Asian market to “overtake on the curve”

As the mainstream form of content e-commerce, live streaming e-commerce attracts many merchants with its higher sales certainty and conversion rate. For cross-border merchants, live streaming e-commerce is undoubtedly a key breakthrough to achieve "overtaking on the curve" in the Southeast Asian market.

First, the huge potential of the Southeast Asian market is a consensus, and the favorable business environment and the gradual improvement of infrastructure are accelerating the development of live e-commerce. Secondly, the recognition of the live e-commerce model by Chinese merchants is an important advantage for them to go overseas in Southeast Asia. Whether it is reusing the operating experience of domestic live e-commerce or making full use of the resource supply of domestic live e-commerce, it has reduced many obstacles on the road to going overseas. In addition, cross-border merchants, relying on their supply chain advantages, can provide newer and more diverse product choices for the Southeast Asian live streaming market.

As one merchant described: The rise of live streaming e-commerce in Southeast Asia, represented by TikTok Shop, provides a new opportunity for going overseas that is "easy to start, easy to explode, and easy to connect."

On TikTok, the Chinese household cleaning brand Seaways has successfully applied its domestic experience to overseas markets and made careful local adjustments. They conducted in-depth analysis of the cultural differences and consumer preferences in the Southeast Asian market to ensure that every frame and every word of the live broadcast content is in line with the tastes of the local market. This precise market positioning and content creation strategy has enabled Seaways to achieve remarkable results in the Southeast Asian market.

In addition, Seaways also keeps up with the platform, grasps key weight indicators and makes corresponding optimizations in live broadcasts. For example, they learned that Southeast Asian consumers are more accustomed to short-duration live broadcasts, so they adjusted the content and format of the live broadcast to adapt to this difference. At the same time, they also pay special attention to local religious and cultural differences to ensure respect and adaptability of the live broadcast content.

In terms of product development, businesses also need to accurately identify the needs of the Southeast Asian market. For example, the best-selling headphones launched by Anker Innovations in Southeast Asia not only have core selling points such as active noise reduction and strong sound quality, but also have the function of a mobile phone holder, satisfying Southeast Asian consumers' pursuit of multifunctional features of products. The same is true in the field of beauty and skin care. China's trendy new products have received high praise for satisfying Southeast Asian consumers' desire for "freshness".

Of course, with the expansion of product categories, supply chain challenges also come along - merchants need a supply chain that matches the traffic and a pallet that matches the platform's operating logic. For newcomers or small and medium-sized brands going overseas, it is safer to start with purchasing live broadcasts from mid- and low-end influencers, while merchants with sufficient inventory depth can try to deploy live broadcasts from top influencers to gain greater exposure and sales.

In addition, the importance of the live broadcast team and execution cannot be ignored. Merchants need to establish an efficient live broadcast team and focus on the flexibility and coordination of content, gameplay, and pallet assembly. At the same time, establishing a good relationship with the platform and communicating in a timely manner to solve problems encountered are also the key to ensuring the effectiveness of live broadcasts.

"Our live broadcast process is rigorous, covering pre-broadcast preparation, post-broadcast review, and weekly and monthly summaries, maintaining the same intensity as the top domestic live broadcast teams. This ensures that our content innovation, varied gameplay, and high flexibility and coordination in product matching are high. Faced with the inevitable negative reviews, score fluctuations, or unfamiliarity with activity rules during live broadcasts, close communication with TikTok Shop's Southeast Asian cross-border e-commerce team has become the key to solving problems. Effective communication helps us move forward steadily." said the founder of a leading TSP agency in Southeast Asia.

For cross-border merchants, the importance of Southeast Asian market layout is self-evident. This fastest growing region in the world for e-commerce has huge economic potential and diverse consumer demand, providing a market foundation for the entry of a large number of new products and new brands. The growth momentum of Southeast Asian e-commerce is gradually shifting to live streaming. The influence of the live streaming e-commerce model led by TikTok Shop has been verified, and no one can remain indifferent to it.

Text丨Miao Yue Editor丨He Yang Shi Lei