Hanoi, Vietnam (TechBiz)– Tiktok shop is emerging as a formidable force, that poses a threat to the major players in e-commerce in Vietnam after attracting a large number of sellers and generating a huge revenue within a short time after it entered the market. This is thanks to its clever strategies leveraging the benefits from the video sharing platform it has successfully developed.
Metric reports that Tiktok Shop sales in November reached VND 1698 billion with 13 million products sold and 32,000 sellers receiving orders. As a result, Tiktok Shop’s sales have been nearing Lazada’s revenue and are four times bigger than Tiki’s. For a new player who has been on the market for less than a year, these are quite impressive results.
According to Metric’s report, Tik Tok Shop sells 434 thousand products on average every day, with each one costing an average of 130 thousand VND, totaling 56.6 billion VND in daily sales. This is a record-breaking accomplishment that took other domestic e-commerce platforms many years to achieve.
However, Tiktok shop’s biggest sales are made up of items with a price range of between 100,000 and 200,000 VND (representing 39% of total sales, or 647 billion VND per month). This makes sense given the majority of the audience on Tiktok right now is fairly young, mainly students who have earned much yet.
According to the latest statistics by Decision Labs, about 55% of GenZ users are using Tiktok. In Vietnam, Tiktok currently has about 20 million users, of which more than 60% are under the age of 30. MarketingAI’s recent report shows that 2 out of 3 Tiktok users are likely to buy something on Tiktok and up to 50% of users have bought something after watching a tiktok livestreams. This proves that Tiktok shop is making good use of its video sharing platform to support e-commerce.
Looking at the list of categories and brands that generated the most revenue in November on Tiktok shop, we can clearly see that cosmetics and beauty products are still dominant, followed by fashion and electrical products.
Despite the impressive growth, especially in the year-end period, Tiktok shop still has to cede the top spots to the 4 eldest brothers in the field of e-commerce when it comes to the entire year’s revenue. Shopee is still leading the market and is far ahead of other competitors, both in terms of revenue for November and the whole year 2022. Currently, Shopee’s sales in Vietnam account for 73% of the industry market share, or roughly VND 91 trillion. Lazada’s revenue comes in second place with 20% of the market share, or VND 26.5 trillion. Tiki’s sales account for 5% or VND 5.7 trillion, coming in at 3rd place and Sendo’s sales rank 4th, accounting for 1% or little under VND 1 trillion.
The distribution of revenue for each category on each major e-commerce platform also seems to have a significant difference. Accordingly, beauty and fashion products bring the largest revenue for Shopee, but the total revenue of other categories on this platform also far exceeds the revenue of the other 3 platforms. The difference in revenue share of each category on Lazada is not too obvious since the sales of the three categories with the highest revenue gains—beauty, voucher-services, and home-lifestyle—are split rather similarly. Smart phone and tablet products (mobile devices) bring in the biggest revenue for Tiki, while on Sendo, cars and motorbikes dominate over other categories.
In conclusion, despite the end of the pandemic, e-commerce remained a common method for buying and sell goods in 2022, growing overall by 18.4% from 2021. Metric estimates that in 2022, with 1.3 billion units of products sold and 566 thousand shops generating orders, the total revenue from the four main e-commerce platforms in Vietnam would exceed 135 trillion VND. The figures are quite impressive.
According to Statista, Vietnam had the fourth largest e-commerce market in Southeast Asia in 2021, valued at $13 billion, standing behind Indonesia, Thailand and Malaysia. However, Vietnam’s e-commerce will overtake that of Malaysia and Thailand by 2025 and reach $39 billion, placing it second in the region behind Indonesia.
This forecast is encouraging and serves as a powerful impetus for sellers and e-commerce platforms to maintain the momentum of growth in order to make even more outstanding progress in the upcoming years.
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Data sources used in this article are provided by Metric’s December report, Statista, Decision Labs, Marketing AI
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