Source: TikTok/@dress.online.shop1
Is TikTok on its way to becoming the next big thing in e-commerce?
Heads up Amazon.com, Qurate, Walmart et al. TikTok is staffing up in preparation to building its own online fulfillment centers in the U.S.
The nation and world’s most popular video sharing app, which had 136.5 million users in the U.S. as of April, has been looking to hire logistics professionals in Seattle. A dozen new job openings were posted on LinkedIn, according to an Axios report.
A job posting for a Business Solutions and Merchant Development Manager, Global Fulfillment Centre included the following: “The e-commerce industry has seen tremendous growth in recent years and has become a hotly contested space amongst leading Internet companies, and its future growth cannot be underestimated. With millions of loyal users globally, we believe TikTok is an ideal platform to deliver a brand new and better e-commerce experience to our users. We are looking for passionate and talented people to join our global fulfillment centre team, together we can build an e-commerce ecosystem that is innovative, secure and intuitive for our users.”
TikTok’s recruiting efforts show that it has not given up on its strategy of becoming a major force in the U.S. livestreaming market. The company earlier this year was reported to have abandoned its plans to expand livestreaming into the U.S. after having flopped in the UK, where it struggled to achieve awareness and failed to generate excitement among consumers.
The company’s efforts were also plagued by operational and labor issues. About half its staff walked out by mid-June, complaining of a “toxic” culture that demanded 12-hour shifts and failed to respect labor rights.
TikTok’s struggles making its in-house livestreaming solution work in the UK may be informing its next steps. Reuters, citing a Financial Times article, recently reported that the video app was in talks with TalkShopLive to serve as its livestreaming provider in the U.S. TalkShopLive works with Walmart to provide shoppable content on Walmart.com.
“When it comes to market expansion for TikTok Shop we are always guided by demand and are constantly exploring new and different options for how we can best serve our community, creators and merchants in markets around the world,” TikTok said. “These efforts include exploring partnerships which further support a seamless ecommerce experience for merchants, which is an important part of our ecosystem.”
- Scoop: TikTok chases Amazon with plans for U.S. fulfillment centers – Axios
- TikTok wants to open warehouses – CNN
- Business Solutions and Merchant Development Manager, Global Fulfillment Centre – LinkedIn
- Countries with the largest TikTok audience as of April 2022 – Statista
- Time’s up for TikTok’s U.S. livestream shopping plans – RetailWire
- TikTok to partner with TalkShopLive for U.S. live shopping, Financial Times reports – Reuters
Discussion Questions
DISCUSSION QUESTIONS: What will it take for TikTok to become a major e-commerce platform in the U.S.? What do you think it is planning to do based on its employee recruitment efforts on LinkedIn?
Poll
Loading …BrainTrust
DeAnn Campbell
Head of Retail Insights, AAG Consulting Group
Jeff Weidauer
President, SSR Retail LLC
TikTok has the top of the funnel sorted: it has a massive audience, huge engagement, and is a point of brand and product discovery for many (especially younger) consumers. It also has shopping tools allowing people to buy directly. The missing piece of the jigsaw is services around logistics and fulfillment. Adding these in a measured way is sensible as it will allow TikTok to create new lines of revenue as well as streamline the shopping experience. It will also be useful for businesses who, to-date, have had to ship to consumers from overseas – they will now be able to ship directly to TikTok.
TikTok has created a powerful self sustaining content creation engine so adding product purchasing power is a no-brainer if they can overcome privacy and offshoring concerns.
TikTok is likely to experience what other social media sites have: users engaged with the media will become disengaged when marketing messages intrude on rich content. People love to buy, but they hate being sold to.
Our data shows that consumers consider TikTok to be the best social media platform for both browsing and buying. Working out the logistical side of the product journey is going to be a massive endeavor but if they actually get it all right, they’ll be in an incredible position.
TikTok has the most critical ingredient for success — EYEBALLS. It is a matter of presentation. While livestreaming has been less than successful, it doesn’t mean TikTok cannot become a retailer that challenges the big boys. It seems they are focused on finding just the proper presentation to accelerate their online presence. It is no coincidence that they are looking for logistics people in Seattle.
As a Chinese company, they have long-term patience and deep pockets.
Welcome to the world of social commerce starring TikTok. This was inevitable. Michael Zakkour stated that social selling and unified commerce were the next wave two years ago. I was skeptical at first however, ultimately, Michael was spot on! With all the momentum building up, it’s clear that TikTok has become ubiquitous with brands, retailers, and influencers lining up to monetize off the platform.
The fusion of customer engagement, social commerce, and entertainment is a natural evolution of the platform. TikTok is planning to build its own product fulfillment centers in the U.S., creating an e-commerce supply chain system.
Like so many of the social platforms before them, TikTok is hot now, but can we count on that being the case in five years? People (especially youth) have abandoned Facebook and Pinterest “just ‘cuz” and moved on to the next hot idea, so why wouldn’t that happen here? I believe they can be an e-commerce player, but not to the tune they’re thinking now. Unless of course they change the platform drastically. First-to-market Amazon is going to be a tough one to dislodge by anyone from a VERY supreme position.
TikTok is a content creator’s dream and can deliver views beyond any other medium. Adding necessary logistical tools for delivery will take effort, but it’s very achievable. The greatest challenge to overcome will be building the trust factor required for financial transactions.
For TikTok, this is a move from communication to retail. Not only is retail a different kind of business, TikTok has no experience or reputation in retail. This challenge will not only be novel, but it will take a long time to earn a trusting spot in the retail market. My reading is that TikTok is so well known and used that the addition of retail will be straight forward and easy. This is not the case, and there are no guarantees for them.
The recruiting will need to focus on talent that knows the retail market well. It will take some very credible stories in where they are going in their retail strategies, and it will take someone that is a leader in retail now and a large amount of compensation to begin the process.
TikTok is the preferred front-end for entertainment, social sharing and shopping. Adding back-end order management, fulfillment and merchant programs will take a completely different set of technology, people and processes, not to mention a huge financial investment and diversion from their current operations and strategy. They’ll not only need to hire individuals with retail experience, but listen to them when they come on board.
TikTok is where Facebook was in 2007. It has more traffic than Google. Isn’t that enough for savvy retailers to realize the opportunity to be seen? And once “the machine” knows what its customers like, it keeps serving more. Retailers should start by putting good content on TikTok. They will figure out how to monetize the effort in short time.