Traders move online to drive holiday profits

January 25, 2024 | 09:41
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Online shopping on e-commerce platforms is growing rapidly and boosting revenues for businesses during the Lunar New Year.
Traders move online to drive  holiday profits
Shopping livestreams have become hugely popular in the last few years, Photo: Le Toan

Sales revenue of Rhys Man, a personal care brand for men on TikTok Shop, has grown by about half over the past month, through a new TikTok shopping campaign.

Rhys Man joined TikTok about two years ago, hoping to increase business sales through affiliate marketing campaigns and shopping ads solutions such as livestreams and TikTok product shopping ads.

At the launch ceremony of the TETastic with TikTok campaign, which took place two weeks ago, Jason Song, a marketing head of TikTok Shop in the Asian-Pacific region, said that this e-commerce platform was trying to help businesses increase revenue.

“With 98 per cent of users expressing positive interaction with ads on TikTok and 94 per cent intending to shop on TikTok Shop ahead of the Lunar New Year, TikTok has awakened enticing business opportunities for small business through various effective marketing methods,” Song said.

TikTok Shop has become the second-biggest e-commerce platform in Vietnam with a total transaction value of nearly $227.8 million, ranked only behind Shopee with a total transaction value of more than $953.5 million, according to YouNet Group.

There are currently about 28 million businesses operating on this platform.

According to market research company NielsenIQ, Vietnamese consumers and businesses have concerns about the upcoming Lunar New Year.

NielsenIQ said that 63 per cent of consumers in Ho Chi Minh City and 53 per cent of consumers in Hanoi are struggling financially. Accordingly, the revenue of the fast-moving consumer goods industry in January and February only grew about 54 per cent compared to the period before the Lunar New Year holiday, and there was no change compared to last year’s break.

The company predicts that online shopping channels will contribute to stimulating the revenue of consumer businesses because more than 70 per cent of the customers of these platforms are young people aged 18-39, and usually office workers. The main factors that encourage online shopping are the shopping experience, a rich variety of products, and promotions.

A report by Metric, an e-commerce data platform, said that the total market revenue of the Lunar New Year decorations market on Shopee, Lazada, Tiki, and Sendo reached $338,000. There were 1,763 shops with orders generated on the four e-commerce platforms with 427,000 product units successfully delivered, an increase of 56 per cent over the same period before the Lunar New Year last year.

Metric expects the Lunar New Year decorations market to earn $2.7 million in revenue on e-commerce platforms in the two months before the 2024 Lunar New Year season, with about 2.7 million products sold.

Consumer behaviour is shifting, with beer a good example. While it is experiencing negative growth on direct shopping channel, the number of orders for beer on e-commerce has increased significantly. Metric statistics showed that in December, beer revenue on e-commerce platforms reached $983,000, an increase of 16.5 per cent over the same period last year.

Dr. Le Thi Hai Yen, lecturer at the University of Economics and Law under Vietnam National University in Ho Chi Minh City, said that shopping behaviour is changing in many different aspects. “Online shopping helps consumers comfortably compare prices between many suppliers and save more money than shopping directly at markets and supermarkets, thanks to the application of many promotion codes,” Yen said

According to the Ministry of Industry and Trade, Vietnam had as many as 62 million consumers shopping online in 2023, accounting for more than half of the total population.

Statistics from the E-commerce Department under the Ministry of Industry and Trade also show that the total e-commerce value of the Vietnamese market in 2023 reached about $20.5 billion, up 25 per cent compared to 2022, an increase of more than $4 billion.

Jason Song, Marketing head TikTok Shop Asia-Pacific

According to a report conducted by TikTok on the shopping behaviour of users in Vietnam during the 2023 holiday season, 69 per cent of users chose to watch short videos to learn about products and services, with 84 per cent of them making purchases.

One in three TikTok users also consider shopping on TikTok Shop due to the appeal of fresh live content. TikTok has been a companion to numerous small businesses, helping boost sales thanks to the diversity in creative approaches and content transformation, such as with the support of e-commerce solutions TikTok Shop and live shopping ads.

Brands need to ensure a comprehensive marketing strategy. TikTok not only serves as a communication channel but is a complete solution in the full marketing funnel, from the stage of increasing awareness among the mass audience to the conversion stage, as well as aiding in retention and promoting shopping actions.

Le Minh Trang, Associate director NielsenIQ Vietnam

It cannot be denied that e-commerce is one of the main driving forces helping the economy grow steadily. Consumers today are very active on e-commerce platforms, use many applications and purchasing platforms at the same time, and are willing to share their experiences. More than 90 per cent of shoppers share experiences to interact with stores, according to our survey results.

However, they also have small concerns because they cannot check the actual product quality until they receive it. Therefore, in interactive livestream sessions with consumers, sellers need to provide the most transparent and clear information, ensure reliability, make it easy for customers to reach quality products, and answer their questions quickly.

With the economy in 2023 relatively gloomy compared to initial expectations, shopping activities on e-commerce were still vibrant. During this period, consumers are interested in essential goods, and consumption of fresh food or personal care items tends to increase on e-commerce platforms.

They come to e-commerce platforms because they can easily access impressive promotions and discount codes that cannot be found in other traditional shopping channels.

If sellers understand consumer psychology, they can provide more suitable products. Sellers must also build after-sales services to ensure reliability, creating more trust for those participating in purchases through e-commerce platforms.

Erica Vanvu, 56, Holland

I always go shopping at the store because physical stores provide a multisensory experience that online shopping cannot replicate. I can touch, feel, and try out products before making a purchase. This tactile experience is particularly important for items like clothing, furniture, or decorations.

Browsing through stores can be a form of entertainment and relaxation, as I love to walk around and look at beautiful products. Shopping at a store allows me to explore new products, and styles, even if I don’t have a specific purchase in mind.

Online shopping is not good for the environment, as the entire transportation system for each item emits a lot of CO2. If consumers return the goods, the entire transportation chain and emissions will double.

Elise, 22, Switzerland

It is easier with online shopping, but I prefer buying at the stores. I check it first on the websites and online platforms, then go to the shopping centre before making a final decision. Online shopping causes me to buy too much. I saw an advertisement popping up when surfing the internet and I can buy it immediately online. It is so fast that I may make the wrong decision.

I spent my New Year holiday in Thailand. Sometimes it is not just the matter of shopping, it is about the cultural exploration. Markets, boutiques, and street vendors often showcase indigenous crafts, traditional clothing, and regional products, providing insight into the area’s customs and traditions. Interacting with local vendors and artisans provided a personalised shopping experience.

Hoang Linh Chi, 32, Hanoi

When it comes to shopping methods, my first choice would be online retailing platforms like Shopee or Lazada.

The benefits of online retailing outlets are, firstly, the wide variety of choices. You can basically find anything except for some really premium products.

Secondly, you can compare the prices from shop to shop so you can make sure that you don't get ripped off. It also saves time because you don't have to dress up, put on makeup, get in your car, and drive. Just a few clicks on the phone and voila you make the purchase.

Of course, there are downsides. You may need to wait a few days for it to be delivered to your house. However, for someone who hardly has time to go to traditional stores due to work, I’d rather stay home working and have my products sent to me. In addition, they sometimes deliver the wrong items, so you have to contact the shop and return the items.

Regarding shopping malls and physical stores, I guess the most significant drawback is the fact that it is more time-consuming, and you cannot compare prices. But I still prefer malls compared to shops on the street because finding a place to park in a bustling city like Hanoi is exhausting. At least shopping centres provide customers with decent parking places.

Do Anh Duong, 21, Hanoi

I usually buy products sold on livestreams from online shops on Tiktok and use e-commerce platforms like Shopee or Lazada for their cost-effectiveness. I typically spend half of my monthly part-time income on personal shopping.

For buyers like me, who are not financially independent and still get an allowance, shopping online offers numerous advantages. First off, shopping applications are rather user-friendly, and watching online livestreams and reading reviews from previous purchasers allow us in-depth understanding of the goods.

The things that attract me most when browsing e-commerce platforms are the discount vouchers and free shipping coupons. Those help youngsters like me save a significant amount of money, plus, the feeling of buying discounted goods gives buyers a more exhilarating experience.

Nevertheless, sometimes online a product received is a lower quality copy of what was actually advertised. In addition, due to the censorship of e-commerce platforms still being lax, it is easy to buy non-genuine or counterfeit goods. And returning or refunding also takes more time than when buying directly.

Although brick-and-mortar shopping provides buyers with human connections, alongside the chance to check merchandise before buying, I still would not make it my first choice as it lacks a financial edge.

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By Hoang Oanh

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