Despite the sluggish economic climate, TikTok Shop has reported over 500% growth in gross merchandise value (GMV) within its live commerce sector over the past eight months, according to the platform.
To stimulate domestic consumer spending during the final quarter of 2024, TikTok Shop plans to invest significantly in discount promotional campaigns, aiming for higher profits compared to the same period last year, in response to competition from China’s Temu and Shopee.
The platform is expected to maintain its sales commission fee after announcing a planned increase in September, while also enhancing monetization opportunities through advertising and live solutions.
TikTok has identified four online shopping personas, revealing that 77% of Thai shoppers engage in online shopping weekly, underscoring the growing acceptance of online retail.
In Thailand, TikTok boasts over 3 million creators and 2.4 million sellers, with 99% being domestic.
Sirinit Virayasiri, head of business marketing at TikTok Thailand, stated that TikTok prioritizes entertainment over commerce, characterizing the platform as an entertainment medium rather than a social or e-commerce site, and providing comprehensive solutions to assist merchants in closing sales.
“77% of Thai shoppers enjoy retail therapy,” Ms. Sirinit noted.
In the final quarter of 2024, TikTok will continue to invest heavily, with expenditures exceeding last year’s, to sustain its momentum in live commerce, which serves as a key driver for its major sales campaigns, according to Kornnika Niwattisaiwong, head of FMCG, E-Commerce at TikTok Shop Thailand.
She pointed out that a new competitor from China offers low prices but caters specifically to price-conscious shoppers.
“We provide a diverse range of product prices combined with entertaining content to appeal to a broader audience while adhering to local regulatory standards,” she explained.
Ms. Kornnika reported that TikTok Shop experienced a significant 500% increase in GMV through its live commerce platform from early this year through the recent mega campaign, 8.8.
The Shop Tab feature, launched in 2023, has simplified product searches for users and contributed to a 100% rise in GMV for TikTok Shop.
Additionally, the number of sellers registering for TikTok Shop Mall has tripled since its launch in the first quarter of this year, with the GMV for TikTok Shop Mall seeing an eighteen-fold increase between January and August.
A Kantar study noted that 80% of TikTok users are likely to shop on TikTok Shop during shopping festivals, reflecting a 140% growth in GMV during major campaigns compared to non-campaign times.
Data from the Mega Sales Festival 2023 indicated that 89% of TikTok users opted to shop during these events, with expectations to spend 1.7 times more this year, according to Kantar.
Furthermore, Kantar revealed that at the end of last year, the average spend per TikTok user was 14,000 baht during sales events, with spending on electronics doubling and health & fitness purchases being 1.9 times higher compared to non-TikTok users.
To enhance competitiveness and maximize sales opportunities, TikTok introduced a framework called PACE.
“P” stands for P-Persona, aimed at understanding the behaviors of target customer groups. TikTok identified four shopper categories: bargain hunters seeking the best deals, effortless shoppers looking for quick processes, inspirational shoppers who are early trend adopters, and purpose-driven shoppers who practice thoughtful consumption.
“A” represents Assortment, as the platform broadens product offerings and promotional packages to increase order value and GMV.
“C” signifies Content, which involves creating inspiring, high-quality content that influences purchasing decisions through short videos and live streams, while “E” stands for Empowerment, utilizing advertising tools to boost sales.
Ms. Sirinit concluded by mentioning that an artificial intelligence feature is expected to be introduced in the last quarter of the year.