Another social commerce platform that everyone should keep their eyes on is TikTok, which is now best-known for its full-screen, vertical, and short-form videos that has empowered a new generation of content creators. TikTok is currently one of the world’s fastest-growing social media applications. It was also the most downloaded app in 2021,6,7 with 656 million users, and has more than 1 billion monthly active users from all around the world.8
In Southeast Asia, TikTok’s reach is vast as well. In October 2021, the app had 87.5 million active users aged 18 and above who were located in Indonesia.9
While it started out as a short-form video-sharing platform, TikTok now offers a unique blend of community, entertainment, and shopping. Taken together, these characteristics help it make product discovery on TikTok interesting and unique to the platform.
In fact, 52% of TikTok users say that they discover new products through TikTok commercials. Furthermore, 61% believe that TikTok advertisements are more unique than those on other social media and video platforms. Another 43% believe that the advertisements they see on TikTok blend in with the rest of the platform’s content.10 These numbers exemplify the effectiveness of TikTok’s social commerce strategy, in which near-seamless integration with existing platform content is a key cornerstone.
According to a YPulse survey, more than half of Gen Z consumers are now on TikTok, compared to 39% of Millennials.11 Although everyone’s purchasing power is limited depending on their personal income, the highest percentage of spending on e-commerce is occupied by both Gen Z and Millennials.
With their highly monthly spending, these two groups are expected to account for half of Indonesia’s total consumption by 2030. These are the generations that increasingly live online. They are voracious consumers of online content and services. Most importantly, they are the ones who will drive the future of the internet economy.12
The increasing importance of Gen Z and Millenial users is what encourages TikTok to go beyond entertainment by presenting unique e-commerce solutions, through means such as TikTok Shopping.13 Unlike e-commerce features on Facebook and Instagram, TikTok Shopping differentiates itself by allowing customers to directly check out from the TikTok app itself.14 Beyond just an online retail service, TikTok Shopping is a holistic suite of solutions, features, and advertising tools that empowers brands and merchants to meaningfully engage with their customers.
One of TikTok Shopping’s subsidiary services is TikTok Shop, an exclusive and innovative marketplace that is fully integrated into TikTok, bringing together online sellers, buyers, and creators. TikTok Shop allows merchants to tap into a full commerce experience. From uploading products to managing shipping, fulfilment, and point-of-purchase, merchants can use TikTok Shop to tap into TikTok’s vibrant user base and streamline the entire customer journey.