TikTok Shop and 6 tips to help your business run effectively

TikTok Shop - the platform leading the shoppertainment trend is very popular with consumers. This type of e-commerce on social networks (social commerce) has opened up many "billion dollar" business opportunities for businesses.

1. What is TikTok Shop?

TikTok Shop is a shopping platform that allows brands and sellers to do business directly on TikTok through short videos, livestreams and product display booths. This feature was officially launched by TikTok in Vietnam in April 2022.

TikTok Shop is currently the preferred choice of many sellers today

Accordingly, when using TikTok, users will experience the shopping feature right on the entertainment social network without having to switch to another application. This is a groundbreaking combination and brings outstanding success to TikTok. Currently TikTok Shop is the platform leading the shoppertainment trend.

2. Advantages and disadvantages of doing business on TikTok Shop

Researching a suitable business platform when expanding the market is an important factor for businesses. Referencing the pros and cons of TikTok Shop will help businesses make appropriate decisions.

2.1. Advantage

Thanks to its unique form of content posting, seller support policies and attractive consumer incentive programs, TikTok Shop is the most popular market today.

For customers

Application interface: easy to see, easy to use
Incentive programs and campaigns for buyers: price subsidies (sale hunting congress), vouchers, freeship codes,...

For sellers

Possessing a large number of users: A large number of users brings huge reach to products and sellers. According to early 2024 statistics from ByteDance, the number of TikTok users in Vietnam reached nearly 68 million people.
Unique in its business form: as a short video platform, TikTok creates a higher conversion rate than platforms with other forms (text, photo,...), thereby increasing the order rate.
Diverse seller support policies: registering a sales account is completely free; Sales fee is only 1% (much lower than other online business platforms),...

2.2. Defect

However, TikTok Shop still has some limitations that need to be overcome that sellers need to keep in mind when choosing this platform as a new sales channel such as:

Inadequacies in product quality and customer service: this rate is relatively high, especially for products of poor quality and sellers with poor customer service.
Difficulty in updating policies: there are too many policies, making it difficult for sellers to understand them all clearly
Limited number of shipping units: there is only 1 shipping unit, J&T, so there are times when orders are overloaded and affect customer delivery time.

Learn more: Learn to sell on Amazon & top courses not to be missed

3. Business potential on TikTok Shop 2024

Although it has only been launched for more than 2 years in Vietnam, TikTok Shop continues to grow strongly. Entering 2024, TikTok Shop officially broke through to reach the 2nd position in the industry, surpassing Lazada.

According to data from data analysis company YouNet ECI, in the first quarter of 2024, TikTok Shop's revenue reached 18.36 trillion VND, accounting for 23.2% of total sales of Vietnamese e-commerce platforms. It is predicted that the e-commerce market in 2024 will increase by about 35% over the same period.

TikTok Shop accounted for 6.3 additional market share points compared to the previous quarter

Announced in ByteDance's advertising resources, TikTok Vietnam currently has 67.72 users aged 18 and over. By inheriting users from TikTok, products on TikTok Shop will reach a huge audience with a diverse customer base.

4. Tips for effective TikTok Shop business

TikTok Shop is a market with strong growth, promising many explosive potentials in the future. Some of the following business methods will help sellers do business effectively and increase competitiveness with competitors on the platform.

4.1. Choose suitable products to sell

According to user age statistics from adsplus, the majority of TikTok users are young people between the ages of 16 and 24, so their popular product niches will be:

14-23 year old group: cosmetics, fashion, decor, school supplies, food,... at affordable prices.
Group 23 years old and older: household items, cosmetics, fashion, children's items, food,...

In particular, data shows that consumers will easily make quick purchasing decisions for products under 300,000 VND. A factor in price competition that sellers can consider.

The market trends and potential of the product niche are also important factors for businesses to choose suitable products. Is the product affected by trends or seasonal? How much market share of products does the competitor have in the market?

These issues will help business people choose the most potential products that will help their business most effectively. Therefore, product selection is very important.

4.2. Exploit popular trends and hashtags

Take advantage of resources available from TikTok such as: trending hashtags, sounds,... This is a simple but highly effective way to increase reach and attract users.

Sellers should choose hashtags that match the topic, field, etc. of their business. In addition, catching trends and hot trends is also a good way to close the gap and stimulate consumers' shopping needs.

4.3. Take advantage of the power of livestream

Livestream is one of the best forms of attracting viewers and increasing sales on TikTok. With the appearance of live sessions with revenue of hundreds of billions of dong, this type is currently popular with many brands. Note that to have an effective live session, sellers should:

Prepare a detailed, careful script, complete backstage setup before the live session
Create announcement videos about the live session with detailed information: time, content, products included in the live, attractive prices,...
Maximize the ability to interact with customers: communicate, answer questions, answer questions, provide further advice,...
Implement giveaways in livestream: attract and retain viewers
You should advise products from the buyer's perspective honestly: giving customers trust, useful information and helping to stimulate consumption
Quickly send goods after customers close orders: avoid overloading orders after live, ensuring customers can receive goods as soon as possible

Vo Ha Linh - "god of war" TikTok livestream with hundreds of billions of live sessions

Investing properly in livestream activities on TikTok can help businesses sell out of inventory after just a livestream session lasting a few hours. Therefore, many units choose to hire KOLs (Key Opinion Leaders) who specialize in livestreaming to increase the appeal and success of the livestream session.

4.4. Cooperate with KOLs/ KOCs/ Influencers

KOLs/ KOCs/ Influencers are people who have a great influence on consumer awareness and behavior about brands. "Borrowing" the influence of celebrities: co-producing creative videos, livestreaming,... will increase users' recognition and love for the brand.

In addition, the comment corners on videos of KOLs/KOCs/Influencers are also golden lands to help viewers know about the store. Interacting with those comments also helps sellers leave special impressions in the eyes of viewers.

4.5. Use TikTok Ads

Using TikTok Ads will help product videos reach more viewers and increase brand recognition. From there, sellers will save time, energy and improve marketing efficiency.

4.6. Optimize customer experience

Product and service quality is the key to retaining customers. Today, the need for personalized experiences is increasingly emphasized. To optimize the shopping experience, sellers need to actively and promptly answer questions and provide additional information on the sidelines.

In addition, product information should be presented as clearly and completely as possible. Improving customer care service will make them love and feel more comfortable in their decision to close orders.

5. Conclusion

TikTok Shop is currently being evaluated as a golden "land" rich in potential, giving sellers many opportunities to develop and breakthrough. Ensuring product quality and creating video content will help businesses easily achieve business success.

Follow AGlobal blog to read lots of useful information.

AGlobal - Amazon's account management, advertising and education partner in Vietnam, helping more than 200+ units export goods simply, streamlined and effectively.