Live streaming sales have spread to Southeast Asia, and Tiktok has directly boosted sales

The trend of live streaming sales in China has spread to Southeast Asia. Live streaming sales is nothing new in China, but recently it has set off a new craze on Tik Tok overseas, and live streaming sales is popular in the Southeast Asian market. In the unique environment of Southeast Asia, what advantages can live streaming bring to gain competitiveness in e-commerce? Let’s take a look at this article, maybe it can help you find the answer.

Anyone who has watched domestic live streaming sales should have some understanding of how complicated it is.

Liu Genghong, who became popular last year, starts live streaming to sell goods through fitness.

If you don’t have some cultural knowledge, you can’t be a host of knowledge-based live broadcasts to sell goods.

(Teacher Li Yongle has even gone into business himself, teaching knowledge and selling products at the same time.)

The main reason why so many live broadcast formats can be spawned on Douyin is that our domestic live broadcast market is large enough, and the pond is large enough, so the catfish that can grow there will naturally be large enough.

Take Douyin for example. According to online estimates, in 2022, the annual growth rate of Douyin's e-commerce transaction volume will reach 70%, and the scale of e-commerce transactions will be close to 1.5 trillion.

At that time, the total online sales of e-commerce in the country was only 13 trillion yuan. That is to say, in China, the sales generated by live streaming of Douyin alone accounted for 11% of the total sales in China.

Hey, since live streaming sales are so popular in China, what is the situation like abroad?

Let me put it this way, last year I wrote an article about live streaming sales in foreign countries. The situation at that time was like swallowing firewood, let alone a fire. There was not even a spark.

Especially in Europe and the United States, manufacturers are simply unable to make a breakthrough. Not only can live shopping in Europe and the United States not be successful.

Even Tik Tok, the big brother of domestic live streaming, suffered the same fate.

Some time ago, the overseas version of TikTok announced that it would temporarily postpone the full development of its North American store.

In addition to the possible ban by the North American government, another reason is that TikTok's live e-commerce performance overseas, compared with that in China, is really based on the defense.

According to data from LatePost, the average monthly GMV (gross merchandise volume) of TikTok live e-commerce in the UK market is only US$24 million. . . It’s just over 100 million RMB. . . In the past, the average monthly revenue in our country was hundreds of billions.

However, although TikTok’s live streaming sales are very poor in the UK. But instead, they have found their home ground in Southeast Asia, where economic conditions are not as good as those in Europe and the United States. In fact, the sales were so good that they far exceeded official expectations.

For example, in 2022, Indonesia, the largest live streaming e-commerce market in Southeast Asia, had an average monthly GMV of US$200 million, nearly eight times that of the UK market. . .

Especially during the Indonesian local shopping festival - " Eid al-Fitr " promotion, not only did the order increase reach 493%, but the GMV increase reached 92%.

This momentum instantly made many Chinese manufacturers, smelling the smell of money, abandon the UK, the "remote and poor" place of live streaming e-commerce, and turn to Indonesia to embrace these Southeast Asian "gold and silver mountains".

I couldn't help but be curious. What kind of magic does live streaming in Southeast Asia have that can attract so many people to consume?

As a result, after walking around, I found that it looked almost the same as the live broadcast in China.

It's just a host holding a product and selling it in front of the screen.

But this form of live streaming sales is also the same in Europe and the United States. Why is it that only Southeast Asia and China can succeed?

Let’s first talk about why live streaming sales don’t work abroad.

The specific reason is roughly that consumption habits are different and there is no price advantage in bringing goods.

In addition, foreign cross-border logistics is relatively slow due to distance. The above reasons result in that when viewers are watching live broadcasts, they have already gone to offline and online shopping malls to place orders directly.

However, all of the above shortcomings are almost gone in the Southeast Asian live broadcast market.

The reason is that TikTok's Southeast Asian model really suits the local people's appetite.

There is a saying when doing business in Southeast Asia: whoever controls Indonesia controls Southeast Asia.

The Indonesian market has a population of 271 million, and the live streaming e-commerce market accounts for 70% of the entire Southeast Asian market.

Moreover, nearly half of the people in this country are TikTok users. This user base provides TikTok with a good user base for developing live e-commerce.

Moreover, unlike the United States, which occasionally made small moves at that time, the Indonesian government's attitude towards TikTok was relatively mild. Due to the huge number of TikTok users, the local government, while coveting the votes of local young voters, banned such national-level applications, which was a very risky move.

With users as the foundation, the only thing left is how to promote one’s own live streaming e-commerce.

First of all, when it comes to buying things, the most important thing for competitiveness is definitely low prices, which is very attractive to the people in Southeast Asia.

A friend who is engaged in cross-border e-commerce in Southeast Asia said in a chat with the bad reviewer:

Doing business in Southeast Asia means that users are happy to buy, merchants are happy to sell, and the platform is happy to make money.

Most of the products sold to Southeast Asia are cheap goods. Among them, the most popular items are small items such as beauty products and accessories . Most of the beauty products on TikTok are sold by Chinese merchants.

On the one hand, this is because the goods are lighter and the shipping cost is cheaper.

A whitening body lotion that is popular in Indonesia

Moreover, the locals don’t really care about the quality of the products, as long as the price is lowered.

For example, among the hot-selling items on TikTok in the past seven days, the top rankings are basically some cheap beauty products and clothes, and the number one beauty product is only US$2.73, which is less than RMB 20 when converted.

The situation is similar in other Southeast Asian countries. You can even see a slime man toy that only sells for 0.03 US dollars in the sales list of Malaysia - this is a childhood memory of the bad reviewer...

This batch of Chinese products whose costs have been swept away by e-commerce platforms, relying on extremely low prices, just meet their consumption habits.

In addition to low commodity prices, merchants' logistics costs in Southeast Asia have also been compressed to extremely low levels.

For cross-border e-commerce, tariffs and shipping costs have always been a major expense.

Amazon's cooperative logistics freight information Unit: RMB

Cross-border freight rates in Indonesia

In Southeast Asia, due to the short distance, not only is the arrival time of goods greatly shortened, but the freight price is also less than half of that in Europe and the United States.

Moreover, according to Rest Of World, most TikTok merchants in Indonesia have local physical stores, and many of their shipments are from their own homes. For local shipments, they can even enjoy TikTok's free delivery subsidy benefits.

That’s right, not only have Indonesian merchants’ operating costs been reduced, but the platform’s subsidies are also very generous.

There is even a saying circulating among the people: If you can't sell much goods, you can survive just by relying on platform subsidies.

Although there is some exaggeration in this statement, in order to grab a share of the market from Shopee and Lazada, the two largest e-commerce companies in Southeast Asia, TikTok has to provide subsidies.

In the early cooperation between JD Indonesia and TikTok, TikTok basically provided subsidies based on the proportion of GMV.

In order to attract merchants, TikTok offers 3.2% commission-free orders from new merchants. Even after the comprehensive adjustments, the commission rate is still 1% lower than Shopee.

It is not just subsidies for merchants, but also a payment model tailored for Southeast Asian consumers.

For example, online payments in Southeast Asia are not as developed as in China, and consumers often need to go through very cumbersome security verification steps before they can complete online transactions.

When I see a good item, I am ready to buy it. After selecting the product, you are ready to pay with one click. As a result, four or five verification codes popped up for us to enter.

There are so many verification codes and I’m tired of entering them, so why not just not buy it?

TikTok has cracked this situation through a model called COD (cash on delivery) .

To put it simply, it means consuming first and paying later, which makes it convenient for users to make impulse purchases.

Moreover, the item is already in your hands. When you look at the courier's sincere and cruel face, you have no choice but to pay. You have to postpone the trouble of getting the consumption verification code. It feels a bit like you are fickle.

Statistics show that cash on delivery accounts for 70% to 80% in Thailand, 40% to 50% in Indonesia, and more than 90% in Vietnam.

TikTok's payment solution is the right remedy for the problem.

And the Southeast Asian market did not disappoint TikTok.

As a new entrant, TikTok had a usage rate of 27.5% of respondents in Ninja Van’s survey in November last year, surpassing the old cross-border e-commerce companies Shopee (26.5%) and Lazada (20.1%).

In terms of live streaming commerce, it is only less than 5 percentage points behind the old e-commerce company Shopee. It's

Moreover, with TikTok's increased investment in the Southeast Asian market, TikTok not only completed the annual transaction volume of 2021 in just half a year in 2022, but its user growth rate was also the steepest and fastest among all types of social media.

】Judging from TikTok’s current performance, Shopee Lazada is probably getting anxious.

Although most people outside are not optimistic about the overseas development of live streaming at present, they think it is just the result of strong subsidies from the platform and miracles from its efforts.

However, I think that in the relatively unknown market of Southeast Asia, it is possible to produce different fruits.

In particular, the Southeast Asian market has unexpectedly remained vibrant after subsidies were gradually reduced. Afterwards, Tik Tok will focus all its attention on the Southeast Asian market.

Perhaps, next time, the grand spectacle of live streaming in China will be repeated one-to-one in Southeast Asia.

Image and information sources :

TikTok, FeiGua Data, LatePost

B station @ London Kj Global Business

References:

1. The Passage | How did TikTok e-commerce make a comeback in Indonesia? 》
2. INDONESIA|What to do when you live stream TikTok: How to shop online?
3. Pinwan | "TikTok Shop shunned by UK consumers but embraced in Southeast Asia, why?"
4. ChinaVenture | "In Vietnam, money is just like lying on the street"
5. China Internet Economy Society: "2022 China Live E-commerce Market Data Report" released
6. TikTok Shop, is it booming in Indonesia?
7. TikTok, a new social media platform, will become a new trend in online shopping in Indonesia

Author: Bad Review

Source: WeChat public account "Chaping (ID: chaping321)"