the influence of tiktok applications on the consumption behavior of generation z living in hanoi in online shopping

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONALECONOMICS ---***--- RESEARCH PROPOSAL THE INFLUENCE OF TIKTOK APPLICATIONS ON THE CONSUMPTION BEHAVIOR OF GENERATION Z LIVING IN HANOI I

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL

ECONOMICS -*** -

RESEARCH PROPOSAL

THE INFLUENCE OF TIKTOK APPLICATIONS ON THE

CONSUMPTION BEHAVIOR OF GENERATION Z LIVING IN HANOI IN

ONLINE SHOPPING

Name:

Class: KTEE206.1 Instructor: Dr Pham Thi Cam Anh

Hanoi, September 2022

Abstract

TikTok platform has been increasingly utilized for several purposes, not only purely toentertain but also to educate, to propagandize, to advertise and even to do business Theresearch objective is to investigate how TikTok social media affects shopping onlinebehaviors of young people in Hanoi This research methodology adopts both qualitativeand quantitative approach and survey method to analyze adolescent’s experience andview over the relationship between online shopping behavior and TikTok As for thesampling strategy, the non-probability purposive sampling method was employed in thisresearch The research sample was 150 adolescents ranging between 15 to 25 age groupsfrom different high schools and universities within Hanoi Research data is self-collectedthrough surveys and questionnaires Consequently, the result shows a strong correlationbetween TikTok and its users’ consumption behaviors Individuals tend to purchaseproducts which appear on their TikTok feed Preliminary findings indicate that TikTokmarketing has a positive and significant relationship on users’ purchase intention Thefindings also assist with implementing digital marketing strategies to engage with theseyoung customers

Keywords: Tik Tok, social media, generation Z, influencer marketing, consumer

behavior

4 Influencer marketing and TikTok influencer 12

VI Scope and delimitation of the research 20

VIII Structure of the thesis report 21

I Introduction

Social networking sites have proliferated over the last decades as a result of thesophisticated and rapid development of technology along with the Internet Asonline shopping has exponentially grown, businesses use social media as a tool forproduct promotion, with the intention of spreading marketing communicationsstrategies to draw attention from users Before making a purchase, up to 70% ofconsumers read online reviews and 81% are influenced by social media posts fromtheir friends and acquaintances In this modern era, people prefer to seek forreference and assistance from social platforms to solve their problems in thefastest, the most efficient and practical way.

These days, various global and local brands encourage social media influencers touse their products or services, as well as to become their ambassadors Along withthe fact that the COVID-19 pandemic has prompted people to spend more timeonline, social media is in higher demand than ever

TikTok is a social platform that appeared in Vietnam in 2018 and quickly gainedpopularity among local users Brands are also capitalizing on this boom bypromoting themselves through celebrities and influencers According to a Satistareport from July 2020, TikTok has over 3.1 million influencers (Brands VietNam) This huge number not only provides businesses with numerous options, but

it also offers an excellent opportunity to meet the entertainment and shoppingneeds of young people, especially generation Z - a potential generation affected bydigitalization with 9% smartphone usage, accounting for 32% of the globalpopulation and possessing up to 44 billion USD in purchasing power.Accordingly, 41% of TikTok users are between the ages of 16 and 24 (7SAT2020) Half of TikTok users admit to having discovered a new product while usingthis platform, and 89% say that they made an unplanned purchase after watching aTikTok video or livestream

Recognizing TikTok’s popularity in Vietnam and the tendency of Hanoi youth touse social networks for interaction, entertainment and shopping In this research,our team wants to approach the impact of TikTok application on the attitudes andpsychology of shoppers to identify the specific factors that influence the younggeneration’s consumption behavior.

II Research objective and research questions

1 Research objectives

● Learn and analyze the TikTok usage habits of people aged 15 to 25 yearsold living in Hanoi

● Determine factors in TikTok affecting shopping behaviors of people aged

15 to 25 years old living in Hanoi

● Propose effective purchasing solutions to consumers and potentialdevelopment oriented purchasing and influencer marketing policies forbusinesses

1 An introduction to TikTok

1.1 An overview of social media

Social media are interactive computer-mediated technologies that facilitate thecreation and and sharing of information, ideas, interests and other forms of

expression via virtual communities and networks (Kietzman et al., 2011) It is a

place where users can share images, feelings or thoughts online with relatives,

family, friends and even with strangers (Leonardi et al., 2013) Recently,

approximately 3.6 billion people use social media and this number is estimated toincrease to 4.41 billion by 2025 (Statista), in which Facebook, Instagram, Youtubeand Tiktok are the most commonly used platforms Social media bringstremendous, evident and pervasive changes to communication betweenorganizations, communities and individuals The application of social media iscreated from the features itself based on users' understanding and the way theyinteract (Mirza,2014) Chen et al (2011) also stated that social media has created astatistically significant difference on consumption behaviors in accordance withage groups along with educational and social status of them

The COVID-19 pandemic has dramatically increased the number of onlineshoppers, which boosted advertising, marketing and selling goods through socialnetworking sites According to the E-commerce Vietnam White book, theproportion of online shoppers rose from 77% to 81% after one year since 2019.Social media is an ideal place to connect with new customers, keep relationshipswith their patrons and promote customers’ experiences

1.2 TikTok

TikTok is a music video and social networking platform originating from China,with the original version called Douyin, developed by ByteDance in 2016, andsurpassed many applications like Whatsapp, Instagram and Youtube in 2018.Contrary to other portable applications, TikTok offers speedy video creationopportunities with incorporated elements of recording, altering, and sharingrecordings that are like actual environment encounters, where the participants stay

in contact with companions and meet new ones TikTok is a virtual environmentpermitting the clients to make circling a video of 15 seconds with raised alteringhighlights remembering for camera speed controls, the picture followingcomposites, cooperative split-screen, camera movement, and special visualizationswhich enhance conventional attributes of play onto the cell phones (Potter andCowan, 2020) With its customized feeds of quirky brief movies set to song andsound results, the app is first rated for its addictive nice and excessive stages ofengagement

Vietnam is now one of the Southeast Asian countries having the highest TikTokuser growth rate (iAgency, 2020), at the end of March 2020, the platform has 12million frequent registered users in Vietnam, 41% of whom are aged between 16and 24 since TikTok is affiliated with the modern mentality of generation Z

2.1 Understanding about Generation Z

Generation Z or Gen Z is the name given to the current generation of young people

by many demographic researchers:

● According to the Pew Research Center, Generation Z consists of people bornbetween 1997 and 2012 The oldest of this generation are reaching 25 years of age,with many now out of college, getting married, and starting families They follow

on the heels of the millennials (born between 1981 and 1996) As a result of the

COVID-19 pandemic, members of Gen Z face a future more uncertain than manyprevious generations encountered

● Gen Z is the generation born between 1995 and 2010 (Francis & Hoefel, 2018).Gen Z has the features of the “network generation” due to the highly developeddigital era in which they were born They are also described as the “Facebookgeneration”, “digital natives” or sometimes “iGeneration” (Tari, 2011) Gen Zyouth have been brought up in the first truly mobile era (Palley, 2012) The KaiserFamily Foundation reports that Gen Z youth are exposed to more media than anyother activity other than sleeping, with a 67-minute daily increase in the number oftime participants spent for and corresponding to the media in 2009, compared with

2004 (Rideout et al., 2010)

2.2 Gen Z purchasing capacity

Gen Z has its own distinct characteristics, and youngsters belonging to thisgeneration have different preferences, perceptions and behaviors than theirparents That they are very famous people since they have a certain voice andinfluence on the cyber community TikTok influencers are the one stop for brandawareness, as well as strengthen bonds with customers and make betterengagement with ideal markets.consume goods and services are influenced to agreat extent by technology They spend most of their time online and use high-endtechnological gadgets

In comparison with previous generations, Gen Z has the potential to makeenormous improvements in marketing and purchasing propensities Their virtualpresence is undeniably noticeable as they have a desire to follow the latest trends.According to a study of 201 models conducted by advertising agency WhoSay(2018), 70% of advertisers intend to increase their budgets to engage influencersand celebrities for their marketing campaigns Around 90% of respondents believe

that collaborating with influencers will have a positive impact on how peopleperceive their reputation The review carried out by Twitter and Annalect (2016)concluded that roughly 50% of customers on Twitter rely on recommendationsfrom influencers as a direction to purchase goods.

Applebum claimed that consumer behavior is closely linked to buying habitsincluding repetitive actions turning into habits Likewise, Lemon & Verhoef, 2016defined it as the synthesis of emotional, sensory and social awareness for decisionmaking throughout the buy process To conclude, consumer buying behaviorrefers to the actions taken by consumers before purchasing a product or service(both online and offline) This process could include using research engines,responding to social media posts, or a variety of other activities Previous researchshows that customers are inclined to be loyal to the brand when shopping onlinethrough social media rather than traditional channels (Danaber, 2003)

Understanding how consumers decide on a product allows businesses to fill amarket gap and identify clearly the market demand, to be more precisely, whichproducts are needed and which are obsolete Consumer behavior research alsoassists marketers in determining how to present their products in a way that has thegreatest impact on consumers It is the key to reach and engage consumers andconvince them to purchase products and services

4.1 Influencer marketing

When a public figure on social media endorses a service or product,this is known

as influencer marketing This new form of promotion from influential peopleworks based on trust Adverts are no longer considered reliable Everyone is moreskeptical of the messages they are exposed to, especially the youth They are morelikely to purchase products that were used, experienced and recommended byothers 88% Gen Z and Millenials learned about goods they desire on these virtualplatforms, and nearly two-thirds of them follow an influencer Brands take benefitsfrom these two stats and implement influencer marketing policies

4.2 TikTok influencer

TikTok influencers can be simply considered as people with large followers andinteractions on this platform They are users that have a more extensive reach thanmost, whose short videos have earned them an online fanbase Likewise, it can beunderstood that they are very famous people since they have a certain voice andinfluence on the cyber community TikTok influencers are the one stop for brandawareness, as well as strengthen bonds with customers and make betterengagement with ideal markets

● Domestic scope: This is one of a few researches about the influence of TikTokapplication on online shopping behavior of Gen Z, specifically aging from 15 to

25 living in Hanoi

● Our research is able to calculate and acknowledge both the general and specificview on the benefits/risks for brands and consumers, as well as the booming onlineshopping among the youth

● The research proposes methods of effective and rational use and management ofusers' experiences and impacts from TikTok Meanwhile, a number of influencermarketing policies are recommended for doing digital business

IV Research methodology and methods

Methodological choice

In this study, the object of research will be the influence of the Tik Tok application

on online shopping decisions of the generation Z living in Hanoi The researchwill be conducted using two independent variables, namely Social Media (TikTok)and the dependent variable, namely Purchase Decision This research will beconducted on TikTok users

Our research will follow Mixed-Methods Concurrent Triangulation Strategy Thisapproach is used because of the following reasons (Creswell and Plano Clark2007; Johnson and Christensen 2004; Johnson and Onwuegbuzie 2004): It canprovide answers to a wider range of research issues; combining qualitative andquantitative methods can strengthen each method while overcoming its flaws;utilizing a mixed-methods strategy can enhance data insights and comprehensionthat might otherwise go unnoticed when employing a single approach; Integrating

triangulating data from several methods improves the reliability of the findings.utilizing quantitative and qualitative techniques independently throughout a singlephase of data collection and analysis to produce richer and more in-depth answers

to the research questions

There will be a possible variable that could be difficult to measure is thecorrelation of the TikTok advertisement and the consumption rate of a certainproduct For example, if a certain product is advertised on TikTok, then it could be

a challenge to calculate and obtain the purchase rate of it We think of twopossible solutions: (1) Using panel data to calculate the correlation by observingthe changes in the products in three periods: Pre-advertise, Advertise and Post-advertise This method will recruit the help of KOL(s) who joined TikTok ShopNetwork in order to obtain precise data (2) Using an equal replacement, whichinstead of measuring the correlation, we could use the questionnaire on how theconsumers decide to purchase a certain product on Tik Tok to find out thecorrelation

The population that will be taken for use in this research are TikTok users whohad at least one successful purchase on the platform