Tiki sees music video as route to e-commerce dominance

A number of recent music videos on Vietnam’s Youtube Trending was sponsored by Tiki. They all feature the company’s logo and a Tiki staff delivering a package to customers. The number of views for the videos range from four million to 100 million as of the time of writing.

Tiki, the second largest e-commerce site in Vietnam in terms of number of monthly web visits, said the videos are part of 100 music projects it plans to invest in.

Many Vietnamese companies have started to use music videos to reach the country’s young and tech-savvy population. Footwear brand Biti’s is considered one of the most successful so far with this strategy. Its Lac Troi (Afloat), performed by pop sensation Son Tung M-TP in 2016, has got over 200 million views.

Vietnam is among the five biggest global markets for YouTube, which in turn is the second most accessed site in the country with a user ratio of 59 percent, behind Facebook at 61 percent, according to a 2018 report by We Are Social.

Most major e-commerce players in Vietnam like Shopee and Lazada are pouring big bucks into promotions to retain regular customers.

Tiki is also offering discounts, but it wants more. Tran Ngoc Thai Son, founder and chairman of Tiki, said promotions alone are not enough since they mostly focus on existing users while music videos reach out to new ones.

But music videos do not come cheap. Independent producer Van Vo said a project could cost VND1-2 billion ($42,900-85,700) in which the sponsor either pays 10 percent to show its logo or funds the whole production.

Tiki’s undisclosed investment in this strategy comes even as it has been suffering losses. Last year Tiki lost VND757 billion ($32.4 million), bringing its aggregate losses since 2010 to VND1.3 trillion ($55.7 million).

But industry insiders said losing money is not unusual for e-commerce firms since it takes time to attract users and consolidate market share.

Although Tiki’s losses continue to rise, it has been able to gain more customers. With 35.7 million web visits as of the first quarter, it now ranks second only behind Shopee, up two places from fourth position a year earlier, according to market research firm iPrice.

The company has been receiving increased investment despite the losses. In January last year Chinese retail giant JD.com Inc invested an unspecified sum in Tiki after announcing it would pump $44 million into the Vietnamese e-commerce company.

Vietnam, with its large population and rapid economic growth, has great potential in e-commerce. The industry has seen robust growth in recent years, with sales rising by 30 percent last year to over $8 billion, according to the Ministry of Industry and Trade.