Mobile-first social video app TikTok is targeting to gain a foothold in Asia Pacific’s “shoppertainment” industry, which is seen to reach more than $1 trillion by 2025, its top executive said on Thursday.
Currently pegged at $500 billion in total gross sales of the e-commerce space, the company is bullish on capturing a chunk of the projected market value of an industry that spans across different online platforms in the region over the next three years.
Based on a study it conducted with management consultancy services firm Boston Consulting Group titled “Future of Commerce” (FOC), more than half or 55 percent of which will be contributed by the fashion, beauty, food and beverage, and electronics sectors.
“TikTok, as a platform, is what consumers need, [as well as] brands and businesses, to be able to get a big slice of that,” TikTok Philippines Head of Brand Partnership Paolo David told the BusinessMirror on the sidelines of their media briefing in Makati City.
Without citing exact figures, he said TikTok is positive that the shoppertainment industry in Asia Pacific will gain traction given its huge particularly in Southeast Asia, where more than 240 million people use the app at least 12 times a day.
“I think, in the Philippines, there are significant TikTok users,” he added, while noting that Filipinos spend an average time of 80 minutes in the app every day, posting, sharing, viewing or commenting on short-form mobile video contents.
David said the firm is in a strategic position to take a large share of the trillion-dollar industry “because we’re (TikTok) entertainment-first.”
According to the FOC study he shared during the event, merchants need to observe these five entertainment attributes: tell stories and educate, focus on video first, don’t force decision-making, be authentic, and recommend the trends.
Given the highly-saturated and competitive retail industry, consumers lose interest in brands that are overly exaggerated and picture-perfect, and with polished advertisements that fail to speak to them. This holds true for 90 percent of digital ads that consumers regularly skip, per the research.
“Consumers today now consider and seek elements of fun and emotional connection with brands when shopping, regardless of whether they are actively looking for a product or casually browsing,” he said, while citing validation, improvement, convenience, recommendation, inspiration, and indulgence as their demands.
The head of brand partnership of TikTok Philippines noted that brands and marketers can seize the opportunity that shoppertainment brings through TikTok since it has already built a strong relationship with consumers.
Proof of which is that 73 percent of TikTok users say they feel deeper connections to brands on it than on other sites and apps they use, while 87 percent say its video content influenced their recent purchases, according to the FOC study.
“With the continuous development of innovative technologies, the potential for brands to integrate entertainment into their marketing strategies are endless,” David said. “The future of commerce is shoppertainment, and it is on its way to redefining the formula of brand success.”
Image credits: Bloomberg