The time of selling through TikTokers

Direct wholesale is sluggish, while sales on e-commerce platforms face great pressure to compete for market share, TikTokers are gradually becoming a channel for businesses to find customers.

TikToker Pham Thoai had a 14-hour live session in a giant, transparent livestream house right on Nguyen Hue walking street, Ho Chi Minh City - Photo: BTC

And in fact, more and more businesses are entering this technology game.

Mr. Nguyen Van Thu, director of GC Food Company ( Dong Nai ), shared on his personal page when the company's products were preparing to livestream for the first time through a TikToker: "It's not even live yet but 25 orders have been closed. There are only 200 combos, guys."

As a result, in 3 minutes of livestream, 400 combos (brown sugar coconut jelly, smoothie aloe vera jelly priced at 128,000 VND; fruit flavored aloe vera jelly 130,000 VND) were sold out beyond the plan, earning more than 50 million VND.

From no one buying to... "best-seller"

GC Food Company is a business whose main products are coconut jelly and aloe vera exported to markets in Japan, Korea, China...

According to Mr. Thu, the company has two factories in Binh Duong and Dong Nai provinces, exporting about 80-100 containers of processed agricultural products to the markets each month. However, facing the new market trend, this business has also "changed" to find ways to sell products through TikTokers.

Sharing about this form of sales, Mr. Thu said that the staff watched and followed a TikToker (from Ca Mau province, with more than 2.8 million followers) and the TikToker texted the company to invite them to participate in the event.

"Last September, for the first time, the company livestreamed to sell products through TikTokers, so it limited the number of orders to only 200. They shipped the products to customers for free on our behalf, with an additional discount compared to the selling price.

I watched the livestream for the first time, there were product codes saved, no order cancellations, very effective compared to traditional sales methods. The company has good products, they have a good team, understand technology and trends, so together we pushed the livestream to be successful," Mr. Thu said.

Similarly, an Indian company (with a factory in Vietnam) owns skin and hair care products such as shower gel, shampoo, conditioner, facial cleanser, lotion... These are products aimed at mid-range users.

According to the company's communications director, the products are sold in supermarkets and grocery stores and are now in a new business direction, which is to link up with TikTokers. This person informed: "Previously, we often asked this model or that singer to try the products and advertise the products with the image of famous people.

But for a year now, we have hired TikTokers to livestream to sell shampoo and shower gel. Surprisingly, the shower gel that is displayed in supermarkets or grocery stores and no one touches it has become a best-seller when sold online, with sales increasing dramatically."

Food, cosmetics, clothing, and fashion accessories are also the products that attract the most attention in livestream sessions. A young business owner (from Quang Ngai province) has a fashion brand with many stores but... is planning to close them, and was coincidentally "tipped off" to connect with a famous designer TikToker for livestream. On the first day, the business sold nearly 1,000 orders!

"For a year now, the wholesale situation on the trading floor has been saturated, revenue has almost stagnated, the stores in District 3 and Tan Binh District have shrunk. Hiring a famous person to livestream one session is equivalent to 3 months of selling on the floor" - this business owner compared sales and plans to hire many TikTokers to livestream sales in the near future.

Livestreaming sales at TikTok Shop's booth at the Innovation Fests 2024 event at Saigon River Park - Photo: BE HIEU

Many businesses "distorted face"

Behind the story of the "explosion" of thousands of orders, there are also many bitter stories with this form of sales that is posing many challenges in solutions for both sides: businesses and TikTokers.

A typical example is the story of Mr. Nguyen Van Thu, through livestream sessions, the revenue brought in after the "storm of orders" was... nothing. Explaining this paradox, Mr. Thu said: "Because I deeply discounted the prices during the live sales, then the costs for TikTokers and the final profit were zero.

However, businesses must also livestream continuously because these sales sessions are channels to lead to other channels; the next orders will gradually increase profits. Especially maintaining livestream to maintain search when customers want their products and brands to appear first.

While businesses with potential are willing to offer deep discounts during large livestream sales sessions to expand their market, small businesses face a lot of pressure when they step onto the TikTok platform. That is what Ho Thanh Van (a business specializing in providing dried goods, spices, and instant foods in District 12, Ho Chi Minh City) shared.

Mr. Van said that before, there were 20 market staff, traveling all over Ho Chi Minh City and neighboring provinces to promote sales. However, this number of staff is now only 1/3, mainly supporting product packaging. All efforts are focused on hiring famous people... to livestream sales.

"Hiring celebrities is too expensive, and for average sellers, after each live stream, less than 40 orders are not enough to cover costs and run the company. But once they go public, they have to follow suit. If they don't follow suit, they will have to kill the brand they've spent decades building," Mr. Van lamented.

Mr. Van further analyzed: a year ago, the total floor fee that businesses paid was 3%, but this year, the total fee is 13%; the speed of cost increase makes product prices and profit margins not enough to cover costs.

The challenge of this form of association also lies in the reduction of the business's brand reputation, if it encounters an "unlucky" livestream session.

Mr. Hoang Vu Huy - Head of E-commerce Management Department of Deevo Joint Stock Company, who participates in online sales training for businesses as well as supporting TikTok-related issues - talks about the "pain" when businesses hire famous people to livestream...

"There are TikTokers with a huge following. Businesses look at that with the belief that their products will spread and promote strongly. But for a TikToker to build an image on TikTok for entertainment and sell food, it is not effective, because the audience is more interested in entertainment than buying.

Not to mention hiring TikTokers with fake followers, having a "structured" purchasing team, that is, installing people to close fake orders, then return the orders. So, if the connection is not for the right purpose, it will affect the business's operating index on the floor. In fact, many businesses have lost face," Mr. Huy warned.

Source: Metric e-commerce data platform - Data: THAO THUONG - Graphics: T.DAT

What should TikTokers and businesses do?

"If you overstate it, it's not good, if you understate it, the media will misdirect the product. Businesses and TikTokers must work carefully, being careless is a bad point. TikTokers also need more time to understand the business's products" - said the representative of this business.

Ms. Mai Ai Phuong - owner of a business selling "second-hand" clothes and household items from Japan and Korea on Nguyen Thien Thuat Street (District 3) - said that she once livestreamed herself and hired a professional livestreamer at a cost of 1 million VND per broadcast. The effectiveness came from people understanding the product story and having the most genuine feelings.

"The TikToker's speaking ability and sales talent are not enough. The livestreamer must understand the product. Even if the item is used, understanding the origin of the product will attract buyers.

"Enterprises must determine the main goal of the cooperation, must diversify designs, have promotions, deliver the right quality and design of advertised products to consumers. Only then will success be long-lasting" - Ms. Phuong said.

Meanwhile, according to some influential TikTokers, such as the TikTok channel of Miss THPN (with more than 87,000 followers), to effectively connect, the problem lies not only with the TikToker, KOL, KOC receiving the advertisement but also with the business.

This beauty queen believes that from the business side, the biggest difficulty lies in setting up an optimal operating system for converting to livestream business. "Businesses must carefully balance investment costs such as KOL booking costs, special discounts during live sessions; shipping costs, packaging, floor fees, commissions, including costs for canceled orders.

In addition, it is necessary to organize an optimal human resources and logistics system, minimizing waste in operations to ensure profits. Another problem is to understand your target customers to choose to participate in live sessions and KOLs that are suitable for the product," this beauty queen suggested a solution.

Assessing this as a new form of sales and needing to be maintained in the near future, but according to the representative of the Department of Industry and Trade of Ho Chi Minh City, no matter what sales channel a business uses, the most important thing is still reputation, packaging, product design and quality...

"With the market shifting, businesses must also change their business methods and expand many distribution channels. Depending on their strategy, each business targets a corresponding customer segment to choose a livestreamer who brings equivalent value.

The most important thing is to take the reputation of the leading business first. If it meets the requirements, it will still stand firm against market fluctuations and competition," this representative recommended.

Businesses livestreamed to sell products at the 2024 Ho Chi Minh City International Ginseng, Spices and Medicinal Herbs Festival held last May - Photo: THAO THUONG

All kinds of costs for hiring TikTok KOLs

The price of hiring a TikTok KOL depends on many different factors such as the number of followers and interactions of the KOL, popularity and reputation, length of advertising videos, number of advertising posts, area of operation of the KOL... Therefore, this service market has many different prices.

According to research, the public price on the internet, the price to hire a celebrity calculated by views and shares ranges from 1 - 10 million VND/1,000 views; and calculated by likes and comments ranges from 500,000 - 5 million VND/1,000 likes and comments.

In addition, if calculated by the time of the long-term contract, the price will be 100 million VND/month; and according to the "golden" time frames such as 6-8am, 11am-1pm, 10pm, the service price will be "higher" because it has the largest number of viewers.

Along with the KOL livestream rental service, the virtual viewing service on this platform also "follows suit". However, Ms. Tran Thi Tan - director of social responsibility TikTok Shop - said that if TikTokers do not build a "clean" channel, that channel will have "squeezed" interactions (flop) and will have difficulty becoming a trend, which will affect the reputation of the affiliated business.

Need to calculate carefully when selling through TikToker

According to a Southern leader of the Ministry of Industry and Trade, the livestream sales form, in addition to its advantages, also has negative aspects that need to be strictly controlled and managed because there are many forms of fraud to lure viewers...

"This is where low-quality, counterfeit goods are most easily sold. Buyers are emotional, sellers sometimes advertise products with exaggerated functions, but actual delivery is another story. Professional businesses need to carefully consider when using this marketing link, because if not careful, it will cause scandal and affect the brand.

Functional units in each locality should also monitor business activities at warehouses, chain stores, and local businesses that use e-commerce sites to prevent commercial fraud," the leader recommended.

Vietnamese people rank 11th in the world for online shopping

According to the affiliate marketing platform AccessTrade Vietnam, there are an average of 2.5 million livestream sales sessions per month, with the participation of more than 50,000 sellers. Vietnamese people spend 13 hours/week watching livestream sales, spending 11th in the world on online shopping.

Among them, videos created by users themselves bring 184% higher conversion efficiency than regular videos distributed by brands.

Recently, the e-commerce data platform Metric reported that Vietnam is the country with the highest growth rate in Southeast Asia in terms of online shopping. Accordingly, Vietnam's e-commerce revenue is likely to reach more than 310,000 billion VND by 2024.

Meanwhile, the Department of E-commerce and Digital Economy (Ministry of Industry and Trade) aims to bring the size of Vietnam's e-commerce market to 14.7 billion USD (equivalent to 880,000 billion VND) by 2025.

Currently, Vietnam's e-commerce has an average growth rate of 25%/year, with more than 63 million Vietnamese people shopping online and an average purchase value per person of about 336 USD.

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