TikTok Shop After the Pandemic: Is It Still a Game Changer?

During the pandemic, one online shopping trend that is also growing in tandem with e-commerce is social commerce. TikTok, a short-video social media platform, and its shopping feature, TikTok Shop, especially have shown their popularity as top social commerce in Indonesia.

In 2019 alone, TikTok has been downloaded more than 500 million times by Indonesian users. Furthermore, 45% of Indonesia's social commerce users utilize TikTok Shop, according to a survey by Populix conducted in 2022, making it the country's top social marketplace.

However, now that the pandemic is over, do online shopping and TikTok Shop still retain their loyal customers?

One of our experts, Mr. PD, was able to share his insights on the current potential of TikTok Shop, especially compared to other e-commerce platforms.

What's the biggest challenge in Indonesia's market share of TikTok?

As people may have known, social commerce has never existed before. Usually, people use Tokopedia, Shopee, or Blibli. However, right now we witness how social media platforms, like Instagram, Facebook, and especially TikTok, have become people's go-to for shopping online.

E-commerce platforms like Tokopedia are no longer the only place people can shop online from. 

Instead, everyone can easily see the recommended products on their FYP page and directly buy from there. FYP (For You Page) is a homepage for TikTok users, and it usually appears on their timeline. FYP generally contains a collection of recommended short videos for the TikTok users.

According to Mr. PD, this provides vendors with several options to market and sell their goods. The largest problem for businesses today, meanwhile, is persuading retailers to use social media and advertise their goods in new and interesting ways.

For instance, retailers on e-commerce platforms typically only sell things via a catalog. Now, thanks to TikTok, vendors can market their goods using innovative techniques like live-streaming.

What's the biggest category in TikTok Shop right now? In addition, does TikTok reduce the number of customers using other e-commerce platforms? 

While Mr. PD couldn't share the exact numbers of comparisons between e-commerce platforms consumers and TikTok Shop users, he agreed that the fashion category is still the biggest product category on TikTok right now.

He also said that it's not true that TikTok shops are "killing" other e-commerce. Instead, TikTok is creating a new environment where e-commerce players can expand their reach and appeal to a bigger market.

In terms of post-pandemic, we see a slowdown in Shopee and Lazada's buyer activity. Is the same happening with TikTok Shop? How's the prospect of TikTok Shop this year?

Naturally, Mr. PD can't dispute that people have started to go out and visit offline stores again, given the end of PPKM (Enforcement of Restrictions on Community Activities) command.

However, does this mean a downtrend for online shopping and e-commerce, in general?

Mr. PD didn't think so. He pointed out that with Ramadan in the first quarter of the year, e-commerce is still and will be doing well. People also still shop online whenever there's a big discount event, like HarBolNas.

In December 2012, the first HarBolNas (National Online Shopping Day), also known as 121212, was celebrated. The objective was to inform and encourage Indonesians about the convenience of online shopping.

Nowadays, HarBolNas is not solely celebrated on December 12. Several e-commerces have altered it into a monthly celebration on twin dates, e.g. on 9.9 (September 9) or 10.10 (October 10).

The men's wear category in China sees a return or cancellation rate of 50%. Is it the same as Indonesia?

50% is a massive number, and Mr. PD isn't sure whether it's the same case with big players in China as well. However, in Indonesia, the return rate is quite low as Indonesian male customers usually already do thorough research before purchasing anything online.

Meanwhile, female customers often experience impulse buying and hence are more likely to return a product they've purchased. Nevertheless, Mr. PD is confident to say that the return rate in Indonesia is indeed very low and won’t be a big concern for TikTok Shop merchants.

Contact us to explore more about the current trends in the e-commerce industry and be connected with our expert network in Indonesia.

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About Mr. PD:

Mr. PD has 2 years of experience in Social Commerce specializing in Category Performance. He also has over 4 years of experience in Ecommerce and Account Management. His responsibilities include handling fashion category performance and making sure there is a good collaboration between AM, merchant, creator, campaign, and merchandise team.