Social commerce has disrupted e-commerce across Southeast Asia in several ways, including through the introduction of social platform shop fronts like TikTok Shops, Facebook Shops and Instagram Shops. 

These offerings all aim to enable end-to-end e-commerce journeys inside social apps, but their feature sets and adoption vary greatly. In this post we share the latest trends in social platform shop front with focus on Indonesia’s vibrant beauty space.

TikTok Shops is the most popular social platform shop front, by far

Our October 2022 analysis of 150 beauty brands from the Cube Asia Indonesia brand panel shows that an impressive 60% of brands are now present on TikTok Shops, while only 34% and 24% are present on Facebook Shops and Instagram Shops respectively. 

This is an impressive lead for TikTok, and even more so considering their relatively recent entrance into e-commerce in Southeast Asia. While the growth in brand shop fronts is certainly aided by TikTok’s strong underlying user growth, we also believe the company’s relentless focus on e-commerce is part of the cause. It shows up in several ways:

• TikTok’s parent company Bytedance has a strong focus on e-commerce in its financial metrics, including regular reporting of its total platform GMV; this practice stands in sharp contrast to Meta, which only reports advertising revenue metrics to investors
  
  
• TikTok often behaves more like an e-commerce platform than a social platform, for example by offering free shipping and cashback for shopping holidays; Meta has never done so in Southeast Asia
  
  
• TikTok invests significantly more resources in teaching brands how to sell on its platform than Meta does; we’ve heard multiple recent estimates of a ~10x gap between the companies in Southeast Asia-focused account managers

TikTok Shops offers the most comprehensive e-commerce feature set

All three social platform shop fronts offer a lot of the same basic features, including an e-commerce catalogue, product categories and filters, and the ability to tag content like posts and ads with specific products.

TikTok Shops, however, provides a number of useful e-commerce features that the Meta ecosystem does not support yet. These include:

• Integrated card and e-wallet payment (versus outbound links to e-commerce sites)
• Native support for first-order discount coupons
• Product ratings and unit sales display
• A comprehensive e-commerce seller centre (similar to Shopee/Lazada)

These features give TikTok a meaningful edge over Facebook and Instagram, both in terms of consumer experience and in terms tools that are useful for e-commerce managers.

Implications for brands and retail companies

As social platform shop fronts become more common and more widely used by consumers, brands and retail companies must react. Here are our observations:

• TikTok Shops is the most complete shop front offering among social platforms today, and the only one which presents a credible alternative to e-commerce platforms like Shopee
  
  
• Facebook Shops and Instagram Shops are useful for funneling traffic onwards to e-commerce platforms or brand websites, but otherwise lacking in e-commerce specific features

Cube Asia offers granular market data and insights for TikTok in Indonesia and the rest of Southeast Asia, including category-specific market sizing, competitive dynamics, pricing and discounting insights, and P&L benchmarks. Please get in touch to hear more about how we can help you enter or grow social commerce channels like TikTok.