THE BIG STORY

Org Chart: The people steering Lazada

Image credit: Timmy Loen

We look at the crew leading Lazada Group as the firm celebrates its 10th year this month.

THE HOT TAKE

ByteDance’s ecommerce play

Here’s what happened:

• TikTok Shop, the ecommerce arm of TikTok, has launched in Thailand, Vietnam, and Malaysia.
• It was introduced in Indonesia and the UK last year.
• TikTok’s ecommerce GMV reached US$951 million in 2021.

Here’s our take:

Last week, The Checkout analyzed why ByteDance shut down its Shein clone, Dmonstudio. There’s been major developments on ByteDance’s ecommerce side since then.

For one, TikTok Shop, which allows creators and brands to sell products directly to consumers through the app, is rapidly expanding across Southeast Asia and has ramped up hiring in Thailand, Vietnam, and Malaysia.

In 2021, TikTok’s ecommerce GMV totaled 6 billion yuan (US$951 million), which is only about 1% of China-only counterpart Douyin’s GMV for the year.

But for 2022, TikTok is looking at nearly 12 billion yuan from its ecommerce unit. It has reasons to be optimistic - the year it was established in China, Douyin’s ecommerce arm saw a GMV of about 500 billion yuan.

Indonesia accounted for at least 70% of TikTok’s ecommerce GMV. The rest came from the UK, where TikTok Shop has been available since April 2021.

While Douyin and TikTok’s parent ByteDance keeps its fingers crossed, it knows that livestreaming and social commerce play up to its strengths.

In 2021, over 1.4 million social media conversations around livestream shopping took place in Southeast Asia, about 2x more than the same time a year before, according to a report from Meltwater. The media monitoring platform also found that Sea Group’s Shopee posted a 2.5x increase in annual livestream viewership on its platform.

Shopee Celebrity Club livestreaming in action / Photo credit: Shopee

ByteDance has been paying close attention to these trends. Last year, Douyin held a series of offline events in China to attract merchants, with executives describing the app’s 600 million daily active users as “very sticky.” The push also coincided with the rollout of payment service Douyin Pay.

The timing is crucial: ByteDance’s ecommerce play comes as China’s government continues to keep a close watch on tech companies for a variety of reasons, including monopolistic behavior. This makes room for others to grow.

Getting into ecommerce also means that TikTok’s parent company considers itself a strong challenger to Chinese giants like Pinduoduo, JD.com, and Alibaba. Others feel that the tide might be turning as well.

Following Alibaba’s recent results, an analyst told the Financial Times that “the hit from Douyin and Kuaishou livestreaming ecommerce has been huge ... Taobao livestreaming can’t compete.” Kuaishou is a Douyin rival while Taobao is a C2C and B2C shopping marketplace operated by Alibaba.

TikTok’s popularity has spilled over to its ecommerce business and it shows. #TikTokMadeMeBuyIt is so catchy that BuzzFeed came out with several articles dedicated to the hashtag.

Once a Chinese phenomenon, livestreamed shopping has gone global and is fast becoming the modern-day version of teleshopping. So much so that Canadian TikToker Lisa Couture had to temporarily close her candy store to fulfill the hundreds of orders that flooded in after her video went viral.

Analysts also think that it’s only a matter of time before Chinese sellers will have access to the wider world through TikTok, which is expected to be “friendlier” to them than Amazon has been.

Besides algorithms and resources, there’s another element at work in the social commerce game: the human factor.

The popularity of TikTok Shop also depends on its roster of livestreaming stars. China’s Li Jiaqi or Lipstick Brother, who sold US$2 billion in goods in a single day on Alibaba, is a good example of the competition that ByteDance faces.

It’s possible that with the now-defunct Dmonstudio, ByteDance could have had some control over the quality of select merchandise. But that’s not possible with a livestreaming model where the company has less control over the merchants on its platform.

Take ByteDance’s Fanno, for instance. Much like Shopee’s problems in India, the quality of products is reportedly a hit or miss on Fanno in Europe.

ByteDance likely expects so much more from TikTok Shop than from Fanno. After all, TikTok already has a captive audience ripe for a livestreaming harvest.

– Nikita

NEWS YOU SHOULD KNOW

Check out Tech in Asia’s coverage of Asia’s ecommerce scene here.
 

1️⃣ Sea Group’s market value fell by US$10.4 billion after the company posted its quarterly results. The slump comes after Sea cut its year-on-year booking guidance for its digital entertainment unit Garena - a first for the Southeast Asian internet firm.

2️⃣ China-based Dianxiaomi, a cross-border ecommerce solutions startup, has secured US$100 million in a round led by Tiger Global Management and Huaxing Growth Capital. Founded in 2014, Dianxiaomi provides enterprise resource planning solutions for ecommerce players.

3️⃣ AlloFresh, an Indonesia-based e-grocery startup, is preparing to launch its business with about 1 trillion rupiah (around US$69.7 million) from Bukalapak and others.

4️⃣ SariSuki, a social commerce startup based in the Philippines, has raised US$10.7 million this year. One of its co-founders is Brian Cu, the former president of Grab Philippines.

5️⃣ After Garena’s Free Fire game was banned in India as part of a clampdown on Chinese apps, Singapore’s government has reached out to the Indian government for clarification. Garena’s parent company, Sea Group, is headquartered in the city-state.

FYI

Photo credit: 123rf.com/supernam

Retailers seek real-world profits in the metaverse

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