- tech360.tv
TikTok, under fire elsewhere, sees spike in Vietnam e-commerce
TikTok Vietnam experiences tripled number of merchants and increased average sales. VinFast motorbikes and Samsung phones contribute to e-commerce growth. TikTok surpasses Lazada to become Vietnam's second-largest online marketplace.
TikTok, the popular social media platform, has experienced a significant increase in e-commerce activity in Vietnam. According to TikTok Vietnam, the number of merchants on its app tripled last year, leading to a surge in average sales. This growth has fueled optimism for the platform in Vietnam, despite facing setbacks in other markets such as the United States and Indonesia.
TikTok Shop, the e-commerce arm of TikTok, revealed that products such as VinFast motorbikes and Samsung phones were among the top contributors to the e-commerce growth in Vietnam.
The rapid ascent of TikTok in Vietnam further solidifies Southeast Asia's position as a key revenue source for the platform. TikTok's parent company, ByteDance, is on track to become the world's largest social media group.
Unlike its thorny relations in countries where it has been banned or faced restrictions, TikTok has established a close working relationship with Vietnam. The platform collaborates with the Vietnamese government on various issues, including promoting social causes and censoring posts. However, TikTok also rejects some of Hanoi's censorship demands and has faced investigations related to these matters.
Nguyen Lam Thanh, TikTok's representative in Vietnam, highlighted the shift in consumer behavior towards online shopping. He mentioned that two years ago, people were skeptical about social commerce due to concerns about cheap and fake products. However, now online shopping has become a popular "hobby" for Vietnamese consumers, as they can follow the story told by the sellers.
In terms of market share, TikTok has surpassed Lazada to become Vietnam's second-largest online marketplace, trailing behind Shopee. Vendors in Vietnam have earned approximately $1.3 billion in the past six months, according to analytics firm Metric. Analysts estimate that annual earnings across Southeast Asia exceed $12 billion, with TikTok's record revenue in the U.S. contributing to ByteDance's global sales growth.
TikTok's success in Vietnam can be attributed to its early establishment of a physical presence in the country. Five years ago, TikTok became the only foreign internet platform to open an office in Vietnam. Initially, it gained popularity as a viral-video app before expanding into e-commerce.
However, TikTok's physical presence also exposes the company to scrutiny and challenges. As the Vietnamese government cracks down on political content on U.S. platforms like YouTube and Facebook, such content has shifted to TikTok. The platform is more likely to comply with takedown requests, with the Vietnamese information ministry stating that TikTok has fulfilled 95% of such requests, compared to 92% at YouTube and 90% at Facebook.
TikTok's Ho Chi Minh City office was inspected by authorities last year, leading to investigations into various issues, including copyright and data storage. As a result, the government ordered TikTok to restrict access for minors and remove "toxic" content that seeks to undermine the party or promote scams.
Despite these challenges, TikTok has managed to navigate controversies and maintain its popularity. Its algorithm, which some critics claim promotes addictive content, has resonated with Vietnamese users. DataReportal reported that Vietnam's Android users spend an average of 41 hours per month on TikTok, surpassing Facebook's 28 hours.
Vietnam aims to promote smart internet usage to help people avoid pitfalls such as disinformation. Nguyen Minh Tien, director of the agriculture ministry's agricultural trade promotion center, emphasized the dual nature of media and social media, acknowledging both the positive and negative aspects.
In line with this goal, TikTok recently launched a program to promote eco-friendly goods in Vietnam. The platform has become a hub for influencers, livestreamers, and hosts who engage in "shoppertainment" to boost sales and promote brands.
While Vietnamese users still rely on platforms like Amazon and Alibaba for exporting goods, social commerce on TikTok is gaining popularity for local shopping. TikTok Vietnam reported 67 million users earlier this year, compared to 50 million the previous year, making it a significant player in the country's digital landscape.
TikTok Vietnam experiences tripled number of merchants and increased average sales.
VinFast motorbikes and Samsung phones contribute to e-commerce growth.
TikTok surpasses Lazada to become Vietnam's second-largest online marketplace.
Source: NIKKEI ASIA