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Product sales in the Tiktok store are declared lower than other trading platforms – Okezone techno

Photo of October 6, 2023
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JAKARTA – TikTok Shop is currently in the spotlight in Indonesia, especially for MSME businesses.

Starting from the phenomenon of the dominance of products sold on the TikTok Shop, these are offered at very competitive prices, even lower than the market ones, causing concern among local entrepreneurs.

The Indonesian government ultimately responded by expressing concern that the prices of goods imported from China sold on the TikTok Shop could harm domestic prices, otherwise known as predatory pricing practices.

Accordingly, starting from September 25, 2023, the Indonesian government issued an official statement to prevent TikTok (as a social media platform) and TikTok Shop (as a social-commerce platform) from being in a single application.

According to data collected by the Think with Hypefast team, 67% of local brands have a TikTok store. Of these, 88% live stream at least once a day.

“Nowadays, more and more local brands have been using new live shopping strategies, one of which is through channels like TikTok Shop and Shopee Live, both to use old inventory and to market new products. This change is quite significant compared to its initial appearance, when brands only used “the marketplace as a sales channel and social media as a channel to present their brand to a larger market,” said Adinda Paramita Pandjaitan, VP Men and Women Category Hypefast, quoted Wednesday (27/9/2023) .

The founder of a local cosmetics brand in Jakarta, with a turnover of over IDR 1 billion per month, revealed that TikTok Shop is especially one of the main sales channels considered effective in clearing out old stock.

“TikTok users are generally younger and have limited purchasing power. Therefore, the sales strategy on TikTok must not only be attractive, but also offer large discounts,” he explained.

Other data obtained by the Hypefast team shows that TikTok Shop contributes around 15-18% to local brands’ total monthly revenue, depending on the product category.

This figure shows a significant increase compared to September 2022, when TikTok’s contribution only reached around 3%.

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On the other hand, the data also shows that profits from sales on TikTok Shop would be 24% lower than other sales channels, such as Shopee, Tokopedia and Lazada.

While TikTok Shop offers new opportunities for local brands to reach broader audiences, especially younger ones, there are serious challenges, particularly stiff competition that often results in reduced profits compared to other retail locations.

This shows that technological adaptation and innovation, regardless of platform, are the key to surviving and thriving in this digital age.

At least this can be seen from the consistency challenge in running live shopping sessions, where you have to do live streaming every day for 4-5 hours.

If a day goes by without a live shopping session, TikTok’s algorithm will reset. This in itself is a challenge, especially for small-scale entrepreneurs who cannot consistently manage live shopping sessions in their daily business operations due to limited resources. ” he said. The founder of a women’s fashion brand in Bandung shares his experience on live shopping, one of which is TikTok Shop.

Beyond that, small business operators will find suitable equipment, as well as a new digital store that undoubtedly requires equity capital.

Edho Zell, CEO and founder of Social Bread Indonesia, also expressed his point of view on the phenomenon of the growing popularity of TikTok Shop.

“Live shopping sessions have democratized opportunities for small businesses and local brands to be able to reach and interact directly with consumers in real time,” he explained.

Quoted From Many Source

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0 41 2 minutes read
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