What M’sian SMEs should know about TikTok Shop, which saw a 78% seller increase in 2023

[This is a sponsored article with TikTok.]

While TikTok is known for its short, entertaining videos, the platform started dipping its toes into ecommerce in late 2021.

In mid-2022, TikTok Shop was rolled out to SEA. 

By Q2 2023, a regional survey conducted by TikTok revealed that the small businesses polled reported a nearly 50% increase in revenues by utilising the platform to sell their products. 

Additionally, over 80% of creators polled experienced boosted incomes through avenues such as TikTok LIVE and brand sponsorships.

Locally, TikTok Shop Malaysia told Vulcan Post that it saw a 78% increase in SME sellers onboarded between January to June 2023, which also marked its one-year anniversary.

So, what contributed to TikTok Shop’s explosive growth, and how can other Malaysian SMEs leverage the platform’s success?

A seamless experience from discovery to purchase

Since expanding to Malaysia, TikTok Shop has been offering interactive and seamless ecommerce experiences for sellers and shoppers alike. 

For one, discoverability for new products is easy on TikTok, meaning that brands can have high visibility.

TikTok users can stumble upon a short video showcasing a cool product, and directly purchase the item within the app in a matter of seconds.

One of our colleagues is a prime example of this, as he had impulsively purchased a sunset light projector which he discovered on his For You page.

In conjunction with this discoverability, LIVE shopping has been a vital catalyst for TikTok Shop’s success. It benefits all parties involved, including SMEs selling on TikTok Shop, livestream hosts, and shoppers. 

As seen through these sellers’ experiences on TikTok Shop, they gained rather large followings and saw increased sales by engaging with their shoppers over livestreams. 

Likewise, shoppers gain confidence in purchasing the products from creators they’re interacting with.

“Not only can they observe the products being sold in real time, but shoppers can also relay their queries about the products and services directly to the seller,” said Wilson Leong, TikTok Shop Malaysia’s FMCG (fast-moving consumer goods) category director.

“This creates a genuine connection between buyer and seller that cannot be replicated via chatbots or messages that could take a longer period of time to conclude [the sale].” 

Motivating sellers with targets and rewards

Like most ecommerce platforms that run promotional campaigns during festive seasons, TikTok Shop is seen doing the same, with added incentives for merchants.

“TikTok Shop has special missions that reward sellers based on their activities on the platforms and growth on TikTok Shop,” Wilson explained. “By completing certain tasks, vouchers are allocated to their store to gain more sales and orders.”

It creates a win-win situation, as shoppers will be rewarded with attractive deals on TikTok Shop, while sellers are rewarded for hitting targets during these campaigns.

Supporting Malaysian SMEs with growth training

It’s worth noting that these incentive programmes aren’t unique to TikTok Shop, as other ecommerce platforms have their own ways to incentivise merchants to perform well too.

But what makes TikTok Shop stand out is the learning materials creators can benefit from through TikTok Shop Academy.

It contains an abundance of guides and courses educating sellers on how they can boost sales and increase brand awareness as an ecommerce business.

Through such guidance, TikTok Shop is building an ecosystem to enable SMEs, especially budding entrepreneurs, to harness their online selling potential and growth.

TikTok Shop has lowered the barrier to entry, encouraging new brands to use the platform as a launchpad for their business.

Leveraging the shoppertainment ecosystem

Ultimately, the success businesses can achieve from selling on TikTok Shop still hinges on a brand’s proactiveness to use the tools provided at their disposal.

One brand that has reaped the benefits of TikTok Shop Malaysia’s tools is COSRX Malaysia (COSRX MY).

For those unaware, COSRX is a Korean skincare brand creating products that use gentle ingredients to address various skin concerns.

The team shared that they’d often participate in the platform’s promotional campaigns, and would maximise the various campaign tools offered.

Examples include the Free Shipping Program, CoFund Voucher, Product Discount, Voucher, and Buy More Save More.

As a result, COSRX MY reportedly achieved a GMV growth of 135% during TikTok Shop’s My Brand Day between April 25-30. It’s an increase from COSRX MY’s revenue during the platform’s Raya & Ramadan Mega campaign.

The brand also placed third amongst other beauty brands on TikTok Shop Malaysia for having one of the highest GMV. 

Placing on TikTok Shop’s leaderboards can lead to better discoverability on users’ For You page, which broadens a brand’s chances of attaining more buyers. 

Ranking higher on leaderboards is often a result of creators consistently livestreaming for a few hours daily and posting short videos frequently.

For COSRX MY, they dedicated a minimum of 14 to 16 hours to livestreaming daily, and 18 to 20 hours during larger campaigns. 

Posting five videos per week was another contributor, as the brand was providing a steady flow of content for audiences to maintain interest and visibility.

Making use of affiliate creators also helped COSRX MY promote their skincare products on TikTok.

“This strategy proved the success in utilising the reach and influence of affiliate creators to promote their products and boost COSRX MY’s revenue,” said Hyojeong KO, COSRX MY’s Assistant E-commerce Manager.

Perhaps SMEs looking to become success stories on TikTok Shop Malaysia can emulate the steps COSRX MY has taken to achieve theirs.

With more festive seasons coming up this year including the coveted 11.11 shopping day, SMEs could take advantage of the shoppertainment tools TikTok Shop will continue to offer.

Featured Image Credit: COSRX Malaysia / Fancy items / BLS Home Deco