- Premium Content It takes our newsroom weeks - if not months - to investigate and produce stories for our premium content. You can’t find them anywhere else.
Jofie Yordan · · 6 min readD2C in Indonesia: life after TikTok Shop ban and why offline retail still matters
Direct-to-consumer businesses have been gaining traction in Southeast Asia in recent years. Many new players have emerged, and investors are starting to pay attention.
According to a report by DSG Consumer Partners, Meta, and Bain & Company, new D2C brands have been “stealing” market share from incumbents.
Photo credit: wihtgod / 123RF
The report states that the market share for young consumer brands in Southeast Asia – which it defines as those less than 10 years old – grew from 19% in 2013 to 23% in 2022. These companies generated US$52 billion in revenue last year.
Two such brands are cosmetics firm Esqa and eyewear retailer Saturdays, both from Indonesia. Their founders – Cindy Angelina and Andrew Kandolha, respectively – joined DSG’s Sameer Mehta for a panel discussion titled “The Future of Southeast Asia’s D2C Space” at the Tech in Asia Conference in Jakarta last week.
See also: India’s beauty D2C space is booming, but SEA’s may be even bigger
Live commerce a boon for beauty
According to Angelina, one influential trend in the beauty category is the rise of live commerce. In the past, customers had to go to physical stores and consult with beauty advisors for their concerns.
“Makeup is a very personalized product. People want to know the right skin tone or product ingredients that are suitable for their skincare,” the CEO of Esqa explained.
Now, consumers can attend live selling sessions from cosmetics brands to inquire about products or see them before making purchases – all from the comfort of their homes.
Live selling on TikTok Shop / Image credit: TikTok
Angelina revealed that the closure of TikTok Shop in Indonesia had an impact on Esqa’s business, especially considering that the beauty category dominated sales on that platform.
However, she noted that the contribution from TikTok Shop on Esqa’s sales – while growing fast – was not as significant as what it saw from other channels.
“We did experience a huge month-to-month growth from TikTok Shop, especially in the third quarter this year [before the closure],” she added.
Physical retailers still crucial
Go regional? Not so fast…
Opportunities with genAI
Stay ahead in Asia’s tech landscape
This is premium content. Subscribe to read the full story.
Young brands should focus on becoming champions in their home market before considering regional expansion, said DSG Consumer Partners’ Sameer Mehta.
We know this is not ideal. ⌛ Sign up in 20 seconds. Cancel anytime.
Our subscriber community includes professionals from these companies:
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
