Shawn Lim
Jul 20, 2023

How local Indonesian brands are thriving with live commerce

Campaign explores why shopping in Indonesia goes beyond a transactional experience between the seller and the consumer, as the country emphasises collective experiences and social interactions.

How local Indonesian brands are thriving with live commerce

The shift towards online shopping is not exactly new in Indonesia as it continues a theme that industry observers have seen, especially since the pandemic. 

However, brands are increasing their investment into various shopping formats, notably live commerce on platforms like TikTok and Shopee, which competes against existing marketplaces like Lazada and Tokopedia and the offline retail pie. 

In Indonesia, which ranks as the second largest user of TikTok globally, Indonesians scroll through and spend many hours on the app daily.  

As a result, exposure to live shopping becomes part of the overall TikTok experience, leading to spontaneous and impulsive purchases as users accidentally land on brand pages or content. The persuasion to buy is driven by engaging content and interactions between buyers and sellers. 

Alex Tan, the commerce director at VMLY&R, explains to Campaign that TikTok engages with content creators to demonstrate their originality and authenticity in engaging with customers as a full-funnel social media platform.  

The platform primarily draws Generation Z and Millennials, resulting in distinct consumption habits and is recognised for its "swipe economy," whereas Shopee and Lazada rely on search and discovery. He says TikTok's foundation is its community, as the platform's business is built around and through it.  

"TikTok swiping frequently leads to unplanned and impulsive purchases as consumers come to discover brand content unexpectedly. Engaging content and dynamic interaction between buyers and sellers influence purchasing decisions," says Tan 

"On the other hand, Shopee's live shopping experience takes a different approach. It requires more deliberate shopper intent, resulting in a more focused planned shopping journey. As a result, brands tend to engage in more product-centric debates, increasing their exposure."

How are brands using live commerce in Indonesia?

For Elvo Indonesia-owned Kelaya Hair Treatment, chief executive Ardian Faisal Akbar tells Campaign TikTok's integration of the live shopping feature into its platform has contributed to increased sales. The brand now has 1.5 million followers and 16.2 million likes on TikTok.

"We started tapping into TikTok Shop's shoppable livestreaming in 2022, and now, the most significant contribution to our sales is from the livestreaming. Last quarter, we generated 70% of sales from livestream alone," Akbar says on the sidelines of the TikTok Shoppertainment Summit in Jakarta. 

"We livestream for around eight hours on a regular day, but when it comes to mega sales days or holidays, we livestream for up to 24 hours." 

@kelayahairtreatment

Akbar began his ecommerce journey as a drop shipper, a retail fulfilment method where a store doesn't keep the products it sells in stock, selling goods and products from China. However, due to tough competition and low pricing, it became challenging to make a profit.  

He decided to pivot and began selling hazelnut oil, commonly used in Indonesia for hair care, before sleeping. To stand out, he transformed it into a shampoo. However, he found the market already had numerous almond oil shampoo brands. 

That changed when TikTok arrived in Indonesia in 2018. Akbar jumped on the platform to create creative content and ads to highlight his product's unique selling points of the combination of hazelnut oil and aloe vera in the shampoo. 

"When I joined TikTok, my brand started gaining popularity. We also started using a brand ambassador, the renowned Indonesian celebrity Art. His popularity, gained from starring in a beloved Indonesian drama, adds to our presence on the platform," explains Akbar. 

"We use TikTok creative centre to get insights on trending, and we have community gatherings with our TikTok community to allow them to share their feedback and ideas on how we can interact with them better." 

According to Akbar, the demand for his products meant that he had to grow his team from 20 to 50, and the company now has a marketing team for its livestreaming channels. The brand also uses a creative agency that is part of TikTok Shop Partners to cope with its livestreaming demands. 

@kelayahairtreatment Udah pada cobain belum sih? �� #Kelayahairtreatment #GrowBackStronger #HairGrowth #DamagedHair #HairCare #HairTok ♬ suara asli - DYREN

Like Kelaya, many other brands have succeeded in Indonesia, which values collective experiences and social interactions. 

According to a spokesman for Monomolly, an online retailer in Indonesia, introducing a TikTok streaming drive resulted in a 30% boost in revenue. Momentum Works, a Singapore-based consultancy, reported that in the previous year, Indonesia accounted for 42% of TikTok's regional gross merchandise value (GMV).  

Jakpat's study shows that around 83% of Indonesians have watched online live shopping, and brands that engage in live shopping have conversion percentages of up to 30%, three times greater than traditional e-commerce platforms.  

These statistics illustrate the enormous success of online live shopping for enterprises in Indonesia, particularly small or local businesses. 

Like brick-and-mortar stores, Tan explains that livestreaming enables real-time contact between brands and shoppers, frequently enabled by key opinion leaders (KOLs), where hosts can respond to comments, answer questions, and give live product demonstrations. 

"Brands can provide viewers real-time promotions and exclusive deals, creating excitement like obtaining an unexpected bargain in a physical store," Tan says. 

"Aside from selling, livestreaming enables firms to foster a sense of community among viewers and create the 'fear of missing out' FOMO mentality in its audiences." 

By transforming shopping into an engaging, interactive experience, shoppers browse products and appreciate the entertainment element when shopping. 

KOLs presenting live sessions reinforce a sense of personal connection and trust by enhancing real-time interactions. 

The capacity to collect and analyse viewers' data enables brands to provide personalised suggestions, while live product demos provide a real grasp of the product, enhancing consumer confidence. Most importantly, these live sessions also establish a sense of belonging, which fosters brand loyalty. 

Motivating consumers and generating loyalty through live commerce

In a typical online live shopping session, real-time product demos give consumers a detailed view of the product as if they were trying it.  

Customers can also engage in real-time consultations, asking product-specific questions or seeking personalised advice, allowing them to make more educated purchasing decisions. 

Furthermore, the community aspect of live selling provides social proof, with the chat or comment option allowing viewers to share their experiences and sway undecided consumers. 

Some live commerce platforms may introduce augmented reality (AR) technology to enhance the 'try-on' experience, allowing shoppers to see how products, particularly in the fashion and beauty sectors, would look on them. 

For example, Indonesian cosmetics brand Wardah used TikTok to offer interactive sessions with well-known influencers, incorporating unique discounts and incentives to promote viewer participation and sales. 

Through its "Super Flash Sale" promotion, Lazada Indonesia collaborates with brands such as Indonesian electronics company Polytron to give substantial discounts on products during specific times in live streams, creating a sense of urgency. 

Shopee has also enjoyed success in Indonesia, with companies such as fashion brand Minimal offering games during live events, allowing attendees to win shopping vouchers through fortunate drawings. 

Flash sales during live shopping events are a popular feature on Tokopedia, as seen by the local clothing brand Batik Chic, which provided huge, time-limited discounts on chosen products during a live session. 

When choosing which platforms to work with, Tan says brands must identify their target audience to decide which platform fits their demographics and preferences. Second, brands should assess the optimal content style and structure for their messaging and narrative.  

Third, they should evaluate each platform's engagement and interactivity, considering real-time interaction and customer evaluations. Lastly, brands should assess which platform best allows them to exhibit their brand identity while encouraging authentic interactions.  

Brands should also analyse the conversion rates and purchase behaviour data and align with specific marketing objectives to make an informed selection. By considering these aspects, marketers may select the platform that best corresponds with their marketing strategy for live shopping. 

"Brands should know their target audience and use compelling storytelling and creativity without compromising authenticity," explains Tan. 

"Offer limited-time deals, collaborate with fit-for-brand influencers and creators, showcase product demonstrations and reviews, and use strong calls to action throughout the live shopping session, urging viewers to purchase, click a link, or add items to their cart." 

Keeping in touch with trends

The rise of live shopping with influencers, the integration of AR and VR technologies, the trend towards one-on-one live shopping sessions, and the convergence of live shopping and social commerce are all critical trends for brands to look for.  

As the market for live selling develops in Indonesia, the number of such activities will increase, as will the number of nano and micro-influencers to fulfil the need.  

The current trend in live commerce is to include active live chats instead of influencers memorising sales pitches. 

"These chats encourage customer involvement and a sense of connection with businesses and provide consumers with fast answers to their questions, assisting them in purchasing decisions," says Tan. 

 

Source:
Campaign Asia

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