TIK TOK SHOP VS BRICK-AND-MORTAR BUSINESS MODEL: CASE STUDY OF TANAH ABANG MARKET

Abstract

Social media has changed the way of communication, social interaction and business. Tik Tok is an application that was launched in 2017. Currently Tik Tok has 800 million active users, this number has surpassed the active users of WhatsApp and Facebook. Tik Tok Shop is one of the most popular e-commerce in Indonesia because it provides cheap products with the advantage of selling via livestreaming. E-commerce is a commercial activity carried out using electronic media such as television, cell phones, the internet and social media. E-commerce is a business model that operates without requiring physical presence between the seller and the buyer so that it can eliminate variable costs such as promotional costs, transaction costs, operational costs and shipping costs. So far, Gamis apparel products have been marketed in physical stores using a brick-and-mortar business model, such as at the wholesale Tanah Abang Market, Jakarta. Meanwhile, the products are supplied by Gamis fashion confectionery entrepreneurs in Bandung Regency. However, the presence of digital technology, for example Tik Tok Shop, has caused many brick-and-mortar entrepreneurs to experience losses, not sell well and go bankrupt. The research results show that the lack of buyers at the Tanah Abang wholesale market, Jakarta, is not caused by Tik Tok Shop alone. However, the high production costs of ready-made clothing produced by confectionery entrepreneurs in Bandung Regency have made it difficult to compete. The operational cost factor for the wholesale clothing sales business at Tanah Abang Market, Jakarta, also contributed to the loss.