Internet celebrities are gathering to disrupt Southeast Asian e-commerce, ushering in a new round of competition

Southeast Asia is becoming a hot spot for domestic live-streaming anchors selling goods.

Not long ago, the anchor Simba came to Thailand and was warmly welcomed by the local Thai government, which even affected the price of durian in the country. In addition to Simba, the Xiao Yangge team, which is very popular in China, is also said to be entering Southeast Asia through the layout of TikTok e-commerce.

Even "Make Friends", led by Luo Yonghao, is working hard to expand its overseas influencer business. According to an insider of "Make Friends", not long ago on June 6, their Thai team just completed a live broadcast to promote products in the local area, and the effect was quite good. It is reported that a large number of Thai celebrities gathered in this two-day live broadcast, including @Pinkysavika with more than 2.6 million fans and @atom2255 with 13 million fans. The products promoted included beauty, maternal and child care, electronics and other product categories.

In fact, "Make Friends" established an overseas business department very early. In May 2017, "Make Friends" incubated an overseas local company in Indonesia. After that, it began to build a Southeast Asian KOL matrix in 2018, and established a US company in 2020, aiming at the technology evaluation of the European and American markets and endorsing Internet celebrities.

For domestic top anchors who have gathered enough "traffic dividends" through various platforms, as well as those MCNs with great market experience and influence, selling products only in China is no longer their only option. In addition, supply chain upgrades and cost reduction and efficiency improvement have prompted more domestic live broadcast forces to connect with Southeast Asian origins faster and more directly.

In addition, many domestic "businessmen" with domestic Internet experience or foreign trade experience in the e-commerce era have already entered the Southeast Asian e-commerce economy.

Compared with the domestic top internet celebrities who were slow to realize the trend, they are obviously more localized, and their attitude has long since transitioned from the simple "MCN" thinking in China to an ecosystem of multiple cooperative service providers that mainly relies on TikTok's live streaming ecosystem, and coexists with MCN and TAP.

So, when they really enter the localized market in Southeast Asia, what kind of ecological niche do these "domestic Internet celebrities" and MCNs occupy?

Thai celebrity account

“Southeast Asia is so tempting”

At present, the so-called "top anchors going overseas to Southeast Asia" are actually still limited to two models: one is the team going overseas based on personal IP, such as Simba's team; the other is the mature domestic MCN model going overseas, such as "Make Friends".

"There's no way, Southeast Asia is just too tempting," Ah Hao, who works in TikTok e-commerce in Indonesia, told us.

“All internet celebrities who have tasted the sweetness of Douyin, Kuaishou, and Taobao Live don’t want to do TikTok.”

However, although these internet celebrities have a huge number of fans in China, they may not be successful in Southeast Asia - "They don't have the ability," said Ah Hao.

For personal IP, big anchors with strong personal attributes like Simba and Xiao Yangge, their fan base is all in China. The recognition of their IP in the Southeast Asian market is far from reaching the level of bringing goods. In addition, the Southeast Asian market itself is limited, and the live broadcasting model is still developing. Even local anchors are far from the size of domestic top anchors, and it is even more difficult for domestic Internet celebrities with language barriers.

Since personal IP going overseas is based on the replication of successful domestic models, they cannot escape the drawbacks of the domestic model when going overseas to Southeast Asia. For example, similar to the domestic situation, the problem of big anchors’ personalities being easily “turned over” also exists in the Southeast Asian Internet celebrity market.

In April this year, View Chin, a Malaysian internet celebrity with 2.5 million followers on TikTok, was exposed by his wife for a lot of "black history". This incident caused an uproar on local social media such as TikTok and Facebook. The personality of the top anchor was instantly "turned over", his image plummeted, and his fans "unfollowed" one after another.

At the same time, all its original commercial cooperation live streaming sales have been suspended, and many local brands that cooperated with it have been affected by the association and demanded to "stop cooperation" with it.

It can be seen from this that the online influencer sales model, which is extremely dependent on personal IP, often has the risk of individual factors affecting the overall business.

At present, the overseas expansion strategy of the top anchors who "go overseas with IP" is often still at the stage of "going overseas with supply chain", which is the "industry chain tracing live broadcast" mentioned by Simba's team when they went to Thailand before. The purpose is to get in touch with lower-cost overseas supply chains as an auxiliary or "selling point" for domestic live streaming, rather than really eyeing the overseas market of local users in Southeast Asia.

"They may want to bring Southeast Asian products or specialties back to China as a form of cross-border trade."

A person who runs an MCN agency in Southeast Asia also expressed a similar view, believing that this type of overseas expansion focuses on the overseas supply chain.

However, for live streaming e-commerce brands using the MCN model going overseas to Southeast Asia, the situation is different: compared with individual internet celebrities going overseas, the institutional live streaming e-commerce model seems more feasible to replicate overseas, and the risks are relatively dispersed.

"Domestic agencies coming here may not have a big problem in the long run, but they will suffer in the short term." He believes that "not being able to adapt to the local environment" may be a big problem for domestic MCN agencies in the process of going to Southeast Asia: "Many agencies are discussing cooperation with local agencies. This is the right way. If it is acquisition investment or something like that, it is more secure."

As for the specific mode of cooperation, the founder of the MCN agency mentioned, "Generally, we incubate and they operate - because they are new here and it is not easy for them to integrate into the local environment, especially when they have to create localized content."

In addition to localized content creation, the overseas expansion of online celebrity agencies also faces the problem of how closely the agencies are tied to the anchors, as well as the loyalty of local anchors. When overseas MCN companies sign "wild" talents and incubate them to become big online celebrities or influential professional anchors, many of the trained anchors often cannot stay in the organization for a long time, which may result in the loss of initial training costs.

Domestic anchors go overseas to "get to the source". Image source: Screenshot of Xinxuan official Weibo

“MCN+TSP”

If you want to expand live e-commerce overseas in Southeast Asia, you cannot do without the operation of the TikTok platform.

"In fact, TSP and MCN are two parallel business lines," said Lin Zongru, partner of M-commerce. People in China are more familiar with MCN agencies, but in fact, the talent business of the top agencies in Southeast Asia is a combination of TSP and MCN.

TSP stands for "TikTok Shop Partner". TSP focuses more on services for merchants, while MCN is more inclined to the influencer side of the business.

In June this year, according to a Reuters report, TikTok announced that it would invest billions of dollars in Southeast Asia in the next few years to deepen its e-commerce business in the market. As a result, Southeast Asia has become one of TikTok's main e-commerce markets.

In the past in Southeast Asia, TikTok's e-commerce business has been facing competition from giants such as Lazada and Shopee.

As officially recognized service providers for influencer anchors and brands, it is conceivable that TSP and MCN will increase their investment in the Southeast Asian market and attach more importance to the service provider group in the future.

The operating model of TSP and MCN in Southeast Asia is different from the domestic "sales thinking":

The common operation form in China is that the agency and the brand reach a product promotion agreement, provide the anchor's live broadcast room with product slots to the merchants, and sell the products for the merchants. In this model, the merchant pays the individual anchor a certain percentage of the commission share, or the slot fee.

In fact, this is a sales model in which the anchor is the "main" and the merchant brand is the "auxiliary".

Big anchors usually have a lot of say, and even show a "completely suppressive" attitude towards brands when selecting products. Many merchants obviously lack bargaining power in front of anchors with large fan groups. In this model, on the one hand, merchants have accumulated dissatisfaction for a long time, and on the other hand, "anchors are very dependent on their personal settings, including image and personal IP."

In TikTok's live streaming ecosystem, TSP's business scope includes both the merchant or brand agency operations and live streaming operations that we usually know about, as well as broader content such as anchor recruitment and training, live streaming room construction, and brand live streaming strategy recommendations.

At the same time, there are also a large number of MCN agencies in Southeast Asia. Faced with the indispensable TikTok e-commerce layout, MCN and TSP will coexist.

In addition, there is a "TAP" model that serves both merchants and influencers. In this model, fees are charged based on clicks on products, and there is no need to sign a contract with an agency. Compared with the "strong binding" relationship between TSP and MCN, TAP is obviously a "weak association". Within the industry, the difference between the two is often likened to the difference between "marriage" and "dating".

The differences between the three modes. Source: Official information

"The biggest difference from the domestic market is that we not only train influencers to bring products, but also help brands to set up live broadcast rooms," said Lin Zongru. "This includes the production of brand short video content and the matching and connection of influencers and celebrities. We need to provide anchors and equipment (for the brand's live broadcast room), as well as a content script team, a photography and videography team, an editing team, and even streaming work, etc."

In fact, the top TSP agencies are more like "marketing companies" rather than "Internet celebrity companies". The so-called "Internet celebrity sales" is only a part of their live broadcast operations. More importantly, the importance of the anchors is far from reaching the level of importance in China.

To be an excellent TSP, a high degree of localization is required, which includes understanding the local history and culture, understanding the local customs and ways of the world, and even the endorsement of various local resources. This is a reflection of the comprehensive strength of a TSP service provider.

For domestic e-commerce live streaming companies going overseas, this is a problem they will inevitably face in Southeast Asia.

“Whether or not I can rent a satisfactory office is a problem.”

The only way to survive in the Southeast Asian ecosystem in the long term is to localize.

"We moved our office in the Philippines three times - because only places like this can recruit the people we want!" Lin Zongru told us.

The quality and ability of local employees are directly related to the working environment and atmosphere. In order to recruit higher-quality local talents, they not only moved their office to the most high-end business center, but also offered employees higher salaries than most local e-commerce companies.

At M-commerce, less than 2% of the employees are domestic overseas workers, and most of the other employees are local Filipinos.

On the one hand, in order to seize the opportunity of the rise of live streaming in e-commerce in Southeast Asia, they did not hesitate to invest huge amounts of money; on the other hand, in order to create a good team atmosphere, after deciding on the strategic direction, they "completely left the specific execution level to their colleagues in the Philippines."

"The first problem that domestic live broadcast organizations encounter when going overseas is how to land," said Lin Zongru. "Whether they can successfully rent a satisfactory office is also a problem."

This is very daunting for overseas companies that do not have local resources or accumulation.

The "start-up period" alone is enough to make many companies "try their best". In addition, in the later stage of operation, the company will also face the problem of how to retain well-developed anchors, achieve efficient management of anchors and teams, and even achieve large-scale profits. Every step of effort may not necessarily yield results.

Different from going overseas in the form of goods trade, the business model of live streaming is actually much more "heavy" than imagined. Today, the top anchors in China are still at the level of "whether to go overseas". In the eyes of the localized live streaming teams that have taken root in the local area, just trying a little bit is no longer in line with the trend of the times.

The business environment in Southeast Asia is very different from the domestic environment we are familiar with. The difficulty of directly learning from the model is only one aspect, but more importantly, it is a matter of "starting from scratch" resource accumulation. If deep localization has not yet been achieved, then it is meaningless to discuss the so-called "opportunity period".

At the beginning of this year, many people who went overseas went to Southeast Asia to visit overseas warehouses and local service providers for their products. When many people actually stood on the land of Southeast Asia to promote their business, they couldn't help but sigh: "It seems that the resources and relationships accumulated in China in the past ten years are no longer useful in an instant, and a sense of isolation will soon appear."

They finally came to the conclusion that if they wanted to do a good job in local business in Southeast Asia, they might really have to stay in the local area for a long time, or have people they trust in the local area and give the local team a lot of authority.

"If you want to do localization well, it means that the focus of your career has shifted overseas, and the next generation may even become overseas Chinese in Southeast Asia!" said a person who has been working overseas in Southeast Asia. Many people who have been working overseas have deeply realized that going overseas in depth is not just a "dinner party" or a "skimpy experience", but a major event that determines the long-term fate of a person or even a family.