TikTok Shops: Revolutionizing E-commerce in the Gulf Region

May 07, 2024

Introduction

The booming e-commerce markets have been using social media to market themselves in the best way, and Tik-Tok is one of the revolutionary platforms for this. However, in Gulf countries, many businesses are now adopting TikTok shops to reach Gulf customers. However, this is not an easy task to achieve. There are still some challenges that e-commerce markets face, along with a bundle of opportunities. You may find more information here; keep reading!

Infographics by GO-Globe TikTok

Rise of E-commerce in the Gulf

E-commerce hit the whole world in the era of the 2020 pandemic because of lockdowns and the closure of big retail stores. That led the whole business world to try different techniques and tricks to improve the online shopping experience. In Europe, the USA, and Southeast Asian countries, E-commerce had been doing well earlier than that. But by 2020 onwards, it had enveloped the whole world, including Gulf countries. Though, previously, conditions were different.

In 2016, a Gartner survey found that over 85% of Middle Eastern firms lacked an online presence, despite e-commerce being widely adopted in other nations, including the US, Europe, and India. Only 2 percent of their retail was online, despite having the most robust internet penetration and one of the world's highest percentages of digital literacy. Also, foreign companies accounted for 90% of all Internet transactions. However, now Gulf countries are becoming hubs of e-commerce and using all kinds of social media marketing for business, including TikTok shops and the latest trends.

The TikTok shops are trending worldwide, and here are some facts; In 2020, 5.7% of TikTok users made purchases on the app. It's expected to reach 27.3% in 2023 and 39.9% by 2026. Well! This is the change that the e-commerce market desires. What is the probable reason for this increased success rate for TikTok shops? It is simple math, it is directly proportional to its active users. TikTok had 1.4 billion monthly active users in 2022, projected to grow to more than 1.8 billion by the end of 2024.

TikTok Shops: New opportunities and Trends

TikTok Shop offers a range of in-app shopping touchpoints that let businesses and artists sell things directly on TikTok. In real-time, market, close deals, and interact with your audience. With only a tap, make engaging videos with your items. TikTok Shop aims to give customers an easy way to shop from within the app. TikTok has made it simpler for marketers and producers to engage with their audience and monetize their content by including e-commerce features. Now that things can be found, explored, and bought without leaving the site, users may have a more convenient and enjoyable purchasing experience.

In the Gulf region, social media, including TikTok, has grasped viewers' attention as customers. This is because of the increased usage of TikTok and attractive digital marketing techniques. TikTok shops are providing the e-commerce market with a huge number of consumers in the form of a vast number of users. It has a larger audience for all kinds of businesses, and even small business owners can have a larger viewership because of tok-tok shops. What else does a common consumer need, entertainment, and shopping side by side? However, there are still many challenges for TikTok shops in Gulf countries.

Common Challenges Faced by TikTok Shops

Gulf countries are famous for their mall culture. Who has not heard of the famous malls in the UAE, particularly Dubai? Therefore, in this region, e-commerce has been facing intense competition. It is also true that markets and demography may impact consumer behavior. Therefore, TikTok shops can face some challenges in the Gulf region.

The mall culture has increased the standards of Gulf consumers, and TikTok shops must make an extra effort to build rapport with these customers. They can enjoy the approach of online shopping; however, they tend to doubt the quality of the product. The e-commerce TikTok shops have to work harder to win trust. Gaining the trust of Gulf customers is essential to the success of e-commerce. To foster trust in their goods and services, brands must exhibit honesty, dependability, and authenticity.

Following cultural norms and conditions is a big issue for the Gulf countries' TikTok shops. Gulf countries have large numbers of consumers, but TikTok shops must establish a rapport with the cultural norms; otherwise, many consumers may ignore them. Some digital marketing tricks of TikTok shops can backfire in the Gulf region. This can be a big problem; who would want to lose such a big consumer market?

TikTok Shops in the Gulf Region

Community Influence on Purchase Decisions

44% of TikTok users in the GCC make purchase decisions based on community buzz.

TikTok Shop Performance

TikTok shops generated $11.09 billion in gross merchandise volume (GMV) 2023.
Beauty and personal care accounted for 22.5% of the total GMV.

Global Distribution of TikTok Shops

Indonesia leads in TikTok shop distribution globally with 20.5%.
Thailand and Vietnam closely follow at 18.3% and 15.4%, respectively.

User Purchase Trends

5.7% of TikTok users made purchases on the app in 2020.
Expected to reach 27.3% in 2023 and 39.9% by 2026.
TikTok had 1.4 billion monthly active users in 2022.
Projected to grow to 1.8 billion by 2023.
The company's revenue has grown exponentially, with an estimated $9.4 billion in 2022.
100% increase year-on-year.

TikTok's Global Impact

In China, TikTok has over 780 million daily users.
The app has been downloaded over three billion times.
10% of UK shoppers have used TikTok shop for online purchases.
Highlights the platform's global growth.
30% of shoppers now start their research on social media platforms, including TikTok.

Internet Penetration in the Gulf Region

Around 92% of the population in GCC countries use the internet.
The UAE, Kuwait, and Saudi Arabia lead the region with high internet penetration rates.
The UAE's internet penetration rate stands at 99.0% as of 2023.

TikTok Shop in Gulf Countries

In the United Arab Emirates, TikTok shop penetration is at 136.4% due to a large expat population.
Saudi Arabia has a TikTok shop penetration rate of 135%, indicating significant user engagement.
Qatar, Oman, Bahrain, and Kuwait also see rapid growth in TikTok shop usage and adoption.

Conclusion

In a nutshell, TikTok shops have been getting the attention of many big and small businesses in the e-commerce market. In the Gulf region, online shopping has now been getting attention; according to a report, younger individuals are more likely to purchase online. In a similar vein, women had a greater interest in online shopping. A third of the women polled acknowledged making an online purchase every week, while 36% of those between the ages of 18 and 24 were seen shopping online at least once a month. These increasing numbers have an effect of TikTok shops, as the viewership of TikTok has been increasing compared to other platforms. This factor directly affects e-commerce in Gulf countries. The ever-increasing fan base of influencers on TikTok provides a significant opportunity for businesses to use TikTok shops in collaboration with these influencers. So along with many challenges, there are many positive markers for e-commerce in Gulf countries using TikTok shops to increase their sales and revenue.

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