Online shopping much more common

After taking part in the Shop Local Saturday program on TikTok in June, Poloman, a local polo shirt brand, garnered 149,000 clicks, 12 million impressions, and an increase of 50 per cent in purchases. Similarly, Beemart, a network of stores providing baking ingredients and equipment, posted over 24,000 clicks, 1.2 million impressions, and a 195 per cent click-through rate. The two are some of many online retailers driving their business forward with social networks.

Covid-19 has seen online advertising tend towards decline but social networks have witnessed growth, according to Mr. Dang Thai Son, CMO of Appota, a tech solutions and digital entertainment content provider. “This growth has come from a large number of micro and small businesses engaged in commercial trading on social networks during lockdown,” he said.

Market boom

There can be no doubt that Covid-19 has dissuaded customers from heading out to bricks-and-mortar stores to shop and take advantage of in-store discounts, but consumers have found a new venue to fuel their consumption needs. One out of three began shopping online due to the pandemic, according to WARC Marketer’s Toolkit 2021, and 80 per cent will continue to do so due to its convenience.

The WARC survey also noted that consumers spend around four hours a day watching videos online, with 75 per cent reporting they have maintained such viewing levels and nearly 90 per cent saying they are ready to take action after watching a video on Facebook. “This results in many more opportunities for online marketing and selling on video platforms, and a shift in investment to social media videos is inevitable,” Mr. Khoi Le, Head of Business and Solutions at Facebook in Vietnam, commented.

A TikTok survey conducted on more than 1,800 Southeast Asian users in March found that one in three want shopping to be more entertaining. “We believe that the desire to shop for brands that entertain customers, a phenomenon known as ‘shoppertainment’, will dominate purchasing patterns in 2021,” Mr. An Bui, Head of Business Marketing at TikTok Vietnam, forecast.

In Vietnam, TikTok has seen tremendous growth in use and content categories. Educational content rose 34-fold from January 2020 to January 2021, entertainment 26-fold, beauty five-fold, and e-commerce five-fold. In fact, according to the survey, in the first quarter of 2021, one in three Vietnamese small and medium-sized enterprises (SMEs) that have used TikTok choose it as their preferred advertising platform, citing its ads as being more effective. TikTok is now the rising marketing channel for large and small businesses alike.

Another Vietnamese social network, Gapo, posted positive business performance in the first half of this year. “We reached 6 million users in the first half and have nearly 2 million active monthly users,” Mr. Ha Trung Kien, CEO of Gapo, told VET. “We recently launched GapoWork, an internal communications platform that helps companies create an environment where people are closely connected and a foundation for building a strong corporate culture.”

Competitive advantages

Facebook, Instagram, TikTok, and many other social platforms have launched different features to improve the shopping experience, with many businesses now familiar with Facebook’s features and tools. However, Mr. Ngo Hong Phuc, Strategy Director at Vero, said the core of social media is as a content platform, so they should use entertainment levers to drive the audience through the sales funnel.

In the 4.0 era, everything is easier with just a few clicks of a mouse, and everyone can work more conveniently through technological devices. Gapo is now aiming to digitally transform workflows to speed-up operations and processes. “We want to spread new vibes, new experiences to more people and bridge the gap between users and Gapo,” Mr. Kien explained. “We will launch a new game in August and hope it can become a new trend on social networks. We then plan to reveal a new unique function that will optimize connecting people together.”

TikTok, meanwhile, launched Shop Local Saturday in June, an initiative for SMEs in Vietnam and Southeast Asia where they are spotlighted extensively across the app, and in July then launched their Mega Sales Campaign, a series of activities offering brands the opportunity to co-create and own a mega sales moment with audiences to further boost the growth of community commerce. According to the Marketing Science Global Authenticity Study in SEA [Southeast Asia] conducted by Nielsen in April for TikTok, 91 per cent of users found the content on TikTok to be unique or different from that of its competitors. Half of TikTok users acknowledge discovering new products or brands while on the app, and 89 per cent made an unplanned and impulsive purchase after viewing a TikTok video; the highest among all social platforms.

Similarly, Facebook in June hosted a live event to release key insights into consumer behavior in Vietnam towards year’s end in the context of Covid-19. “The year-end sale season will be an opportunity for businesses to re-emerge from the pandemic, and it’s crucial for businesses to tap into these moments and grow their business,” said Mr. Khoi. “So we also strengthened our efforts by launching a website live for six months, with materials, solutions, and guides for businesses to leverage throughout the season.”

The ultimate goal of major social networks now is sustainable development through financial sources, according to Mr. Son from Appota. Therefore, they have been continuously upgrading their platforms to create tools for advertising and sales. Some social networks from China allow sellers to have AR (augmented reality) smart recognition tools that can make their stores more attractive and also have a variety of interactive games with customers and buyers. Many third-party solutions are also being developed to integrate into social networks, such as toolsets for fanpage administration, botchats, and direct sales.

However, social media commerce in Vietnam remains incomplete, Mr. Son complained, as their involvement ends when orders are placed. Buyers and sellers must still contact each other directly to complete the transaction. This is still a weakness of social media sites compared to other e-commerce platforms. 

Social commerce vs e-commerce 

Social commerce in Vietnam is a force to be reckoned with. The phenomenon is noticeably clear outside of urban areas, where Facebook is a strong competitor against some of Vietnam’s leading e-commerce platforms. Mr. Thue Quist Thomasen, CEO of YouGov Vietnam, sees that e-commerce platforms not only compete with each other but also individual retailers on Facebook, Zalo, Instagram, and even TikTok.  

“Social commerce is part of the entrepreneurial fabric in Vietnam and is a major source of innovation,” he said. “A great example has come during the fourth wave of Covid-19 in the country. Large e-commerce platforms and super apps have not been able to crack the code on how to provide an appealing offer in the fresh food delivery category. As a consequence, social commerce is filling the gap at a time when demand is high and will most likely capture and nurture the market. Established players should take note and follow its development to help inspire their own innovations.” 

However, Mr. Son argued that the growth of social commerce does not create pressure but merely supplements and promotes the development of traditional e-commerce platforms in Vietnam. “Social networks are important and a part of the purchasing journey of Vietnamese e-commerce customers, from finding information on a product to selecting and providing post-purchase feedback,” he said. “If all is done well at this stage, e-commerce platforms can attract a large number of customers from social networks.” 

In short, he explained, social networks and e-commerce platforms in Vietnam are complementary. There is also a trend of social networks creating tools and transforming into e-commerce platforms in order to serve their own customer base, as TikTok does, while, conversely, many e-commerce sites have introduced more entertainment space to keep users on the page, such as competitions and shopping livestreams. 

Disadvantages for commercial activities on social networks in Vietnam include platforms still not having a full array of tools to support purchasers, and, especially, a lack of payment systems as well as longstanding consumer habits, Mr. Son noted. Consumers in Vietnam still prefer cash-on-delivery (COD) and almost all social media platforms in Vietnam do not have payment features to support users. 

Both local and foreign social media platforms in Vietnam hold the key to social commerce, Mr. Thomasen insisted, and Facebook and Zalo are major social commerce channels. This means that brands need to be omnipresent and gain deep insights into the target audience on these separate platforms in order to fully utilize the channels. In addition, having a good presence on both local and foreign social platforms allow brands to build awareness as well as brand reputation among different audience segments.