In our recent blog posts we’ve detailed the rapid rise of e-commerce on TikTok and how TikTok Shop is starting to cannibalise sales from other online and offline channels in Southeast Asia. But why are millions of consumers flocking to this new channel to browse and buy? Our latest consumer survey provides new answers. Read on to learn more.
Consumers: We go to TikTok Shop for the unique shopping experience and great deals
We recently surveyed nearly 2,000 TikTok Shop buyers from Thailand, Malaysia, Indonesia, and the Philippines to better understand their motivations for adopting and using TikTok Shop. The results are uniform across markets and point to two standout factors; shopping experience and the perception of cheaper prices.
#1: Shopping experience (Video shopping and live shopping) The most popular purchase driver in our survey is the TikTok Shop shopping experience, or more specifically the presence of video-based shopping and live shopping which TikTok is famous for.
We’ve known for a while that TikTok encourages sellers on TikTok Shop to increase their investment into short-form video creation and hosting live shopping sessions, but until now it’s been hard to substantiate whether consumers truly appreciate and reward these moves – or whether they are merely requirements for optimising reach and relevance on the channel.
The findings from our survey strengthen the link, indicating that consumers do in fact value shopping-focused content on the platform highly. Brands that already sell on TikTok should consider whether there’s more to gain from increasing investment in content creation, while brands not yet selling on TikTok must ensure that short-form video creation and live shopping are both parts of go-to-market planning.
#2: Cheaper prices
The second most popular purchase driver on TikTok Shop is cheaper prices, or at least the perception of cheaper prices.
For while TikTok Shop definitely has attractive deals (especially during live shopping sessions and flash sales) and an assortment that generally skews towards the lower end of the price range across all major product categories, our research does not indicate that TikTok Shop has lower prices than other e-commerce channels on average.
In fact, on the contrary, many brands that sell on multiple channels mark-up their prices on TikTok Shop by 5-15% to recoup investments in content and capture what we’ve previously heard described as the “impulse premium”, or the ability to charge a slightly higher price because consumers on TikTok Shop are less likely to perform detailed price comparison before buying.
Nevertheless, sellers must consider this perception of cheaper prices when planning assortment and pricing strategies for TikTok Shop; affordable products with clear value-for-money are still the way to go.
Hungry for more detailed data and insights? Contact us today
TikTok Shop is the fastest-growing e-commerce channel in Southeast Asia, but also the most unique. We help consumer brands and institutional investors make sense of the opportunity and plan for growth through detailed market data and insights.
Can we help you? Get in touch today on simon@cube.asia.
