TikTok Shop is reshaping Vietnam’s e-commerce sector, merging entertainment and commerce to attract a young, tech-savvy audience. By focusing on dynamic and engaging content, it has become a powerful marketplace for specific product categories. However, the platform’s success is not evenly distributed, with some segments flourishing while others face challenges. Understanding these dynamics offers valuable insights for brands aiming to succeed in this highly competitive environment.
Categories like thrive on TikTok Shop, leveraging its shoppertainment model to captivate audiences. In Q1 2024, these segments collectively generated 36 trillion VNĐ in GMV, with fashion leading at 23.4 trillion VNĐ, according to YouNet ECI.
→ For more E-commerce report: YouNet ECI
Yody, a Vietnamese fashion brand, exemplifies this success. By hosting live streams featuring influencers styling their clothes and offering flash sales, Yody has created an interactive shopping experience that resonates with younger consumers. This approach not only drives sales but also builds a loyal customer base that associates the brand with innovation and accessibility.
Similarly, the beauty category, which contributed 12.6 trillion VNĐ in GMV, thrives through product demonstrations and influencer campaigns. For instance, skincare brands like Some By Mi have successfully used TikTok to showcase transformative results in short, engaging videos. Tutorials, customer testimonials, and influencer endorsements further enhance the appeal of these products.
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Regarding home supplies and appliances represents about 4.13% of TikTok Shop's total GMV globally. Viral "life hack" videos and live-streamed showcases featuring products like portable blenders or mini air fryers drive demand for these practical yet trendy items. This reflects a broader trend: on TikTok, even utilitarian products can succeed when paired with creative storytelling and live selling sessions.
Their relatively low price points lower the purchase barrier, making them easy to sell and appealing for impulse buying. Additionally, these products stimulate customers' shopping desires, as users are more likely to purchase cheaper items without overthinking, especially when presented in an entertaining and visually appealing context. TikTok Shop’s ability to spotlight affordable and visually engaging products through live streams and short-form videos has proven transformative for these categories, underscoring the importance of tailoring content to platform strengths and consumer preferences.
→ Read more: Livestream Sales – A Savior or a Destroyer of Vietnamese Businesses?
Not all categories align with TikTok’s fast-paced, content-heavy nature. High-end electronics, such as laptops and cameras, often struggle. While these products may generate initial interest, they require detailed specifications, trust in the seller’s reputation, and after-sales assurances—factors that TikTok’s format does not readily provide. This is evident in the 28.4% GMV decline for high-end electronics in Q1 2024, as reported by YouNet ECI.
A key reason for this underperformance is the income level of TikTok’s core user base, which primarily consists of young, budget-conscious individuals who are less inclined to invest in high-priced items. Additionally, high-end electronics are typically low-demand purchases, made less frequently than essentials or affordable luxuries. Without sufficient consumer confidence in the seller’s prestige and reliability, such expensive purchases are often deferred to other platforms better suited for high-value transactions, such as marketplaces with detailed reviews and warranties.
Similarly, generic home and lifestyle products face challenges on TikTok Shop. These low-cost items often lack distinctive features to captivate users in a visually driven ecosystem. Despite their affordability, the perceived need for such products is generally low. As a result, buyers are less motivated to make a purchase unless the products are tied to compelling or creative campaigns. This is reflected in a 16.3% decline in GMV, with the average order value at just 109,000 VNĐ.
These trends suggest that TikTok’s current user base prioritizes affordability and engagement over high-value or low-utility items, emphasizing the need for brands in these categories to reimagine their approach. For high-end electronics, building trust through influencer partnerships or certifications could make a difference. Meanwhile, sellers of generic items must invest in unique storytelling or bundling strategies to stand out in a crowded marketplace.
I can see TikTok’s potential to grow as a platform for higher-value products will likely depend on its ability to address these barriers, perhaps by integrating features like enhanced reviews or more robust seller guarantees. For now, the platform remains most effective for affordable and engaging products that align with its audience's preferences.
TikTok Shop’s greatest strength is its ability to combine entertainment and commerce. This shoppertainment model resonates deeply with Vietnam’s youth, who are drawn to interactive and visually appealing shopping experiences. According to Boston Consulting Group, 81% of TikTok users in Asia-Pacific are influenced by video content when making purchasing decisions, a testament to the platform’s influence on consumer behavior.
Influencer campaigns play a critical role in this success. Beauty influencer Linh Makeup, for example, uses TikTok live streams to demonstrate product applications and answer questions in real-time. This level of engagement builds trust and drives immediate purchases, particularly in categories like beauty and fashion.
TikTok Shop is not just a marketplace—it’s a cultural phenomenon that demands a new approach to e-commerce. Brands in thriving categories like fashion and beauty must continue investing in creative content and influencer collaborations. Meanwhile, brands in struggling segments need to innovate, either by bundling products, crafting compelling narratives, or collaborating with content creators to enhance visibility.
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