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Sales of FMCG and beauty products, however, have seen their sales surpassing pre-closure levels, according to Indonesia e-commerce market research firm Compas.co.id.
It noticed that while TikTok Shop has reopened, the dietary supplement category experienced a notable decrease in sales quantity, down by 38 per cent as compared to the period before closure.
TikTok Shop Indonesia stopped facilitating e-commerce transactions on October 4 last year but has since reopened through a joint venture with GoTo to “support Indonesian MSMEs (Micro, Small and Medium Enterprises)”.
The JV launched its first e-commerce campaign known as the Beli Lokal (Buy Local) initiative launched on December 12, which also coincided with the country’s National Online Shopping Day – a government program designed to grow the country’s digital economy by supporting local MSMEs. The campaign was launched on both TikTok and Tokopedia, with a strong focus on local products.
According to Compas.co.id, other online marketplaces saw an increase in sales quantity after the closure of TikTok Shop.
For instance, sales quantity in Tokopedia was up 14.5 per cent, 5.1 per cent for Lazada, and one per cent for Blibli.
Following TikTok Shop’s reopening, the firm noticed that sales of FMCG and beauty products have surpassed their pre-closure levels.
“The FMCG category demonstrated significant growth, with an impressive 80 per cent increase in sales value and 96 per cent increase in sales quantity. This positive trend is attributed to the introduction of new products, particularly within the Beauty category.
“In fact, the Beauty category exhibited a remarkable 250 per cent increase in the number of products sold,” Dilano Satria, Head of Data and Analytics at Compas.co.id said in response to queries from NutraIngredients-Asia.
Last year, the three bestselling dietary supplement brands on TikTok Shop Indonesia were skincare and supplement brand Natur-E, Mom Uung which focuses on maternal health products and supplements, and Cool-Vita which mainly sells collagen and vitamin products, according to Compas.co.id.
NutraIngredients-Asia has reached out to TikTok for comments.
Strength in backend integration
Indonesia-based dietary supplement brand Youvit says one of the key advantages of TikTok Shop is its effective backend integration, allowing brands to track the marketing and sales performance of the resellers and influencers that they work with.
The platform was also one of its fastest growing sales channels before its closure, although offline sales were still the main revenue contributor, bringing in about 80 per cent of the brand’s sales.
The brand resumed its sales activities on the shop in mid-January.
“We’re launching again and that’s great because we saw a lot of growth in that channel last year. It was one of our fastest growing channels, and a good place for us to talk more about the product and educate people about the details of the product,” Wouter van der Kolk, co-founder and CEO of Youvit told NutraIngredients-Asia during the brand’s relaunch on the platform.
He said that the advantage of TikTok Shop was the seamless connection between social media and e-commerce.
“When it comes to Shopee or Tokopedia, our marketing is mostly done on other social media channels like Instagram and Facebook and then people are re-directed [to the e-commerce site], but it’s still not as optimal as having it all in one place within one app, where social media and e-commerce are like seamlessly connected,” he said.
Another advantage is that it could help brands better measure the performance of different marketing methods and influencers.
“From the back end, you can decide how you manage campaigns with resellers and influencers and track the sales that’s happening through the influencers, which is something that it’s not possible when you link, for example, Instagram and Shopee.
“It opens a lot of new opportunities for us in terms of marketing.”
He said it remained to be seen whether the GoTo and TikTok JV would lead to further backend integrations or bring about new forms of advantages.
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