TikTok is making an aggressive move to increase its e-commerce revenue by launching TikTok Shop Mall which offers branded products.
The mall is part of its TikTok Shop. The move is also aimed to capitalise on the US$11.6-billion e-commerce sector in Thailand this year and compete with existing e-marketplaces Lazada and Shopee, which each have their own cash cow brand malls LazMall and ShopeeMall, respectively.
Since the launch of TikTok Shop Mall early this year, it has amassed 400 sellers, over 1,000 product items and has delivered 100,000 orders.
"We aim to grow TikTok Shop rapidly with content-driven commerce or shoppertainment," said Kornnikar Niwatsaiwong, head of FMCG, e-commerce at TikTok Shop Thailand.
Boston Consulting Group forecast Thailand's shoppertainment gross merchandise value in 2025 would be $12.4 billion, up 54% from $3.4 billion in 2022.
TikTok has a mature ecosytem with a strong creator community and high adoption of e-commerce and social commerce, and brand adoption in e-commerce.
To capitalise on shoppertainment growth, TikTok Shop widened its new service to launch TikTok Shop Mall that offers assortments from a wide variety of leading brands, stores and sellers available on the platform.
"We ensure that brands in TikTok Shop Mall are authentic products, free returns within 15 days if not satisfied with the product and free shipping to enhance safe and reliable shoppertainment experience," said Ms Kornnikar.
TikTok Shop's study revealed that 81% of consumers are willing to pay more for peace of mind and confidence that they are purchasing products directly from the brands and 87% of users prefer to buy products from a certified store.
The top five categories are fashion and accessories, beauty and personal care, food and beverages, electronic devices, and household items.
Statista forecasts e-commerce market growth in Thailand in 2024 will reach $11.6 billion.
Meanwhile, Euromonitor expects Thailand's retail e-commerce to grow at an average of 15.4% during 2024-27.
The sellers in TikTok Shop Mall will get the mall label with exclusive brand campaigns and gain more visibilty.
In terms of revenue, the mall charges a commission fee of 4-6%, depending on product categories, the same amount charged to those on Tiktok Shop.
She said overall addressable brands will be around 5,000 brands, with TikTok Shop Mall expected to gain as much as possible.
Currently TikTok Shop has 2.4 million sellers, of which 99% are local. The majority of users are 18-34 years old.
TikTok Shop is in the process of registering as a local entity.
Therefore, customers will not be subject to the 1% fee for foreign currency conversion.
Holders of credit cards issued in Thailand will be charged a fee of 1% for foreign currency conversion when they make purchases in baht from merchants and online shops registered outside the country.
Local credit card issuers are imposing the fee, known as dynamic currency conversion, for payments in baht using Visa and Mastercard cards.