- Feb. 11, 2022 -
Both merchants and service providers have high hopes for TikTok e-commerce and look forward to the early blossoming of this traffic treasure land.
The wave of going to sea has created a number of wealth myths, and in the eyes of many people, TikTok e-commerce is the next giant ship that is about to set sail. Big ships are still being built, and people who want to take the lead have poured in.
Enter TikTok in the Indonesian job site Jobstreet, there are more than 400 related positions. One of them is from TCL Indonesia, recruiting Live Streamer, that is, live streamers, and his job responsibilities include live broadcasting on TikTok, selling goods, operating account content, and cooperating with talents. There are many similar recruitment information, from beauty, clothing, e-commerce and other companies.
Click on TikTok Live, you can also see a lot of anchors who are carrying goods. The background is slightly deserted, usually a white wall and simple shelves, but the main processes such as the anchor explaining the goods, prompting the purchase, and interacting with the audience are no different from those in China.
Domestic live e-commerce has been vigorously staged for many years, but overseas this is still a fledgling field. The world's largest consumer market, the United States, has a total of only $6 billion (about 38.1 billion yuan) in 2020, while China's live e-commerce market exceeded 1.2 trillion yuan in the same period.
Indonesian TikTok e-commerce anchor who is live streaming with goods
In 2021, the global Internet giants are entering the live e-commerce. Amazon, Youtube, Instagram, Twitter, Pinterest, etc. have all launched or increased the live shopping function last year. The purchase potential of one billion monthly active users and the content form of short videos undoubtedly make TikTok the platform with the most potential to drive the development of overseas video shopping.
Under the storm of Amazon's suspension, more merchants have realized the importance of multi-platform layout. A variety of factors superimposed, people who do not want to miss the outlet enter the market early, there have been many merchants and service providers to develop TikTok e-commerce business, and even rely on TikTok business to attract financing. Both merchants and service providers have high hopes for TikTok and look forward to the early blossoming and fruition of this traffic treasure land.
The commercialization of TikTok has accelerated
According to late Post, in 2021, TikTok will massively expand its advertising, overseas e-commerce and live broadcast teams, and the total number of employees will increase from less than 4,000 in early 2020 to nearly 20,000.
Advertising (TikTok For Business) and e-commerce (TikTok Shopping) are the two legs of TikTok commercialization.
In terms of advertising marketing, as the website that surpasses Google in terms of clicks in 2021, TikTok can no longer be ignored, and the marketing budget allocated by the brand to TikTok is gradually increasing. According to foreign media reports, a leading international advertising agency tripled its advertising budget for TikTok in 2022 and will double again by 2023. TikTok's advertising business has a target sales target of $12 billion in 2022, up threefold from $4 billion in 2021. TikTok's advertising business is led by Blake Chandlee, a former Facebook executive and now TikTok's global head of global commercialization, who reports to TikTok CEO Zhou.
In the field of e-commerce, in some markets to open up the e-commerce closed loop, cooperation with independent station platforms, TikTok e-commerce process in 2021 to press the acceleration button, and plans to enter the world's major mainstream markets in the next five years.
In May 2021, the media reported that Douyin adjusted the personnel structure of the e-commerce business to distinguish between domestic and foreign markets, and Kang Zeyu, president of Douyin E-commerce, was responsible for the management of non-China regions to expand the internationalization of e-commerce. The adjustment is believed to mean that Douyin e-commerce will accelerate its expansion and develop the TikTok global market. Previously, Kang Zeyu had been in charge of TikTok's e-commerce strategy, reporting directly to Zhang Lidong, chairman of ByteDance.
Last year, TikTok took the lead in launching a small shop (TikTok Shop) for local merchants in Indonesia, and then launched a small shop and recruited sellers in the United Kingdom, and launched a series of e-commerce functions in the United States, but has not yet opened a small store.
That is to say, when TikTok users in some areas browse TikTok videos or watch live broadcasts, they can already view the corresponding products by clicking on the "little yellow car", completing the process from planting grass to pulling grass. In the United Kingdom and Indonesia, where small stores have been launched, TikTok e-commerce has achieved a functional closed-loop, that is, all aspects of live broadcast and short video shopping can be completed in the app; in the semi-closed-loop US region, users need to jump to the off-site platform to complete the purchase.
According to 36Kr to the sea, the payment, logistics and other chains of TikTok small shop have been basically perfected. Cross-border merchants can ship through TikTok cooperative logistics, or through their own overseas warehouses. User payments are made through third-party payments such as PayPal, and merchant payments are made in partnership with people like Payoneer. TikTok small shop merchants can use data analysis, logistics fulfillment and other tools in the background, TikTok charges a 5% commission for small shop merchants, and also has support policies such as free mail and commission for live broadcast merchants.
The process of Chinese enterprises going to sea is often summarized as the "time machine effect", which copies the tried and tested Internet thinking and playing style in China to the overseas market and wins the opportunity. If we take the time machine to review the development of Douyin, we may also be able to predict the next development path of TikTok:
In 2018, Douyin and Taobao reached a cooperation to launch the "shopping cart" function.
In 2019, Douyin launched the "Douyin Small Shop", "Shopping Cart" access to more third-party e-commerce platforms, and set up a live broadcast department.
In 2020, Luo Yonghao's live broadcast debut opened the era of douyin live broadcast with goods; byte set up an e-commerce department, and then douyin live broadcast adjusted the external link and rate policy, moving towards the closed loop of e-commerce.
In 2021, Douyin Payment will be launched to complete the payment closed loop; the first Douyin E-commerce Ecological Conference will be held to clarify the platform positioning of "interested e-commerce" and the ecology of merchants, talents, service providers & institutions.
At this stage, Tiktok can be compared with Douyin in 2018-2019 in its own functional development, cooperating with third-party platforms and launching small shop and shopping cart functions at the same time.
With the development of Douyin e-commerce, in the past two years, Byte has also continuously built or invested in logistics, warehousing, supply chain, payment and other e-commerce links in China, laying out e-commerce infrastructure, and one of the TikTok cooperative logistics is the cross-border logistics service provider Zongteng Group that Byte previously invested in. In addition to TikTok e-commerce, Byte has also launched an independent e-commerce application Fanno overseas, coupled with dmonstudio, a women's fast fashion independent station that has recently been rumored to be online for Byte, revealing a more comprehensive cross-border e-commerce ambition.
Douyin e-commerce experience is in front, ByteDance layout follows, TikTok e-commerce seems to be a natural success.
Start-up period: Dividends and uncertainty coexist
Similar to Douyin, advertising marketing, talent cooperation, and live streaming are also the main ways to play on TikTok.
Since commercialization has just started, TikTok's exposure cost is not high, and mature brands that are good at marketing have already tasted dividends at TikTok. Fast fashion brand SHEIN has a good exposure on TikTok by working with a large number of KOLs/KOCs, creating brand campaigns and encouraging users to share content, providing commissions to bloggers with goods, and so on. #sheinhaul (SHEIN out of the box) under the label there are a variety of bloggers to share try on, SHEIN official account will also publish bloggers wear videos every day. At present, the #Shein hashtag video has been played more than 20 billion times on TikTok, 4.2 billion times #sheinhaul, and the number of fans of TikTok's official main account has exceeded 3 million.
SHEIN TikTok official master account
Another big overseas brand Anker's short video content is all kinds of evaluation explanations, scenario implant videos, through the official account and cooperative bloggers. The short video of an Anker charging treasure that has been played by just one passenger planting grass on the plane has already exceeded 10 million views. Compared with ads on Facebook, the CPM in the United States in the third quarter of 2021 was about $35, while it is understood that the average CPM of TikTok ads was about $10, and if the content caused a blockbuster spread, it could greatly reduce the cost of exposure.
For players trying TikTok e-commerce, the low exposure cost at this stage is also an advantage. Take Newme, a home furnishing brand that has gained customers through TikTok, as an example, in the closed-loop UK, with the help of free traffic, do live streaming with goods. In the United States, the paid traffic play method is adopted, short video delivery is done, and the flow is diverted to independent stations, and there have been explosive products with tens of thousands of orders in four days.
Douyin defines its e-commerce business as "interest e-commerce", TikTok also follows a similar logic, #TikTokMadeMeBuyIt (TikTok let me place an order) under the label has accumulated more than 8 billion views, the content for stimulating consumers' desire to shop can be seen. Planting grass for high-quality content marketing and then pulling grass for e-commerce conversion is the ideal TikTok brand growth path.
But at this stage on TikTok, there is still a lot of uncertainty in the link after the exposure.
The first is the uncertainty of transformation. Referring to third-party Tichoo data, in January this year, an anker Indonesia TikTok small shop with 650,000 fans had sales of less than 10,000 US dollars, and Jingdong Indonesia's Indonesian small shop, which is at the top of the Indonesian regional list, estimated sales of about 450,000 US dollars, compared with 2021 Jingdong's cooperation in Douyin. A number of practitioners who operate TikTok e-commerce told 36Kr that the daily GMV of TikTok is not high at present, and the turnover of a live broadcast may range from hundreds to a thousand US dollars.
The biggest reason is that overseas users are not familiar with live shopping. Users lack consumption habits and minds, coupled with TikTok's current stage of inaccurate streaming, user tags are not perfect, ROI is difficult to have a fixed number.
ROI cannot be guaranteed, and many merchants are also taking a wait-and-see attitude towards TikTok's e-commerce business. Shen Yi, head of TikTok's operation-related business, told 36Kr to go to the sea that at present, their main related business is still on behalf of the delivery, last year TikTok launched the live broadcast business after they also launched the agency broadcast, generation operation related services. Most of the customers I reached were also interested in TikTok Live, but weren't sure when they would try it.
The second is uncertainty about the brand. Shen Yi mentioned a pair of leggings that became popular on TikTok, directly called TikTok leggings (TikTok leggings), the label video has been played nearly 800 million times, and dozens of results can be retrieved on Amazon as a keyword, and the original popular leggings brand has become a secondary attribute in this process. In Shen Yi's view, brands may need more high-quality content to cultivate user loyalty and stickiness in order to grow on TikTok.
Gu Jun, the founder of Newme, also believes that TikTok e-commerce relies on the playing style of explosive single products at this stage, which determines that its brand attributes are not strong, and it is still mainly based on scale at this stage. He also said that using TikTok to divert traffic to independent stations and guide repurchases, and then using Google search term optimization to enhance the brand, the overall investment is worth it.
TikTok e-commerce is waiting to take off
Regardless of the short-term performance, practitioners generally believe that TikTok e-commerce is a worthwhile thing to do in the long run, so first lay out the "placeholder", with the TikTok commercialization process, it may be "taken off" when.
Adhering to the idea of "placeholder", the overseas e-commerce company Orange Yi has incubated 700+ TikTok accounts, and there are top search accounts under multiple tabs. Founder Wang Ruohui summed up their way of playing is to first incubate accounts in batches, and then do content and e-commerce around a small number of accounts in the future. In his view, TikTok e-commerce is a long-term opportunity, compared with amazon and other platforms of live shopping, TikTok's user level, domestic experience and explosive logic have more potential.
Some merchants have experienced "take-off" on Douyin. For example, Perfect Diary, with reference to the "Douyin E-commerce Ecological Development Report" data, a single GMV in 2020 is up to nearly 7 million; the domestic FMCG brand PWU on Douyin's explosive products left incense beads GMV more than 10 million.
Operating accounts first or trying to stream goods live, big brands have begun to lay out, such as the aforementioned Anker. For big brands, short-term revenue may not be the most important thing, first run through the model, and then flexibly adjust according to the situation.
Service providers have also entered. In addition to advertising agencies and celebrity marketing agencies, there are also various companies that provide TikTok e-commerce training, store opening, broadcasting, operation and other services, as well as cultivating their own account matrix and carrying out self-operated e-commerce. In the selection supply chain, merchants who try to operate their own e-commerce are also moving forward in exploration. To go further, some merchants believe that they also need differentiated product selection and back-end supply chain capabilities that are more in line with consumer needs.
TikTok official also launched a creator platform (Creator Marketplace, similar to the Douyin Star Map) to match the needs of celebrities and merchants, TikTok Alliance (Affliate, similar to the Douyin Selection Alliance) to match talents and goods, and recruited official partner service providers (TikTok Shop Partner) to provide e-commerce services for celebrities and merchants.
When will TikTok e-commerce be able to "take off"? Referring to the process of vibrato, there may be only one "Luo Yonghao".
Overseas marketing company orangutan PONGO began to do TikTok e-commerce services in Indonesia last year, and the founder Na Xin also believes that TikTok will break out, the infrastructure is already available, but it also needs a large benchmark event or figure, combined with products that meet the needs of users, to drive a larger market.
However, when Douyin entered the e-commerce, live shopping was already widespread, and it also had mature interest in recommending technology and a large number of content creators. In contrast, the stage of TikTok's overseas environment is more youthful, the popularity of live e-commerce, the growth of users' minds still need time, and TikTok's own data functions also need more accumulation and iteration. "Luo Yonghao" or "Li Jiaqi" may not come so quickly.
A billion users spread across the globe is also a challenge, meaning diverse policy and cultural differences. Live e-commerce is directly oriented to local consumers, from overcoming jet lag and language differences, to more localized content, selection that meets the needs, and teams with localization capabilities, all of which are higher requirements for merchants. The potential of the global market will have to overcome many obstacles before it can be fully unleashed.
In Indonesia, TikTok e-commerce is growing. Na Xin told 36Kr to go to the sea that the number of local users, merchants and live broadcasting levels are gradually growing, and the total GMV of Jingdong Indonesia Small Store operated by PONGO has reached the level of one million US dollars during the double eleven to double twelve period.
The TikTok account of an Indonesian anchor with goods
Some of the former education and training and tourism industry practitioners in China have also turned to overseas TikTok e-commerce anchors with the help of language capabilities. A practitioner who is doing the recruitment management of TikTok anchors in Indonesia told 36Kr to go to sea, many of which are currently TikTok e-commerce anchors in Indonesia, many of whom have been shopping mall salesmen, entertainment live anchors, housewives, etc. After accepting the job of e-commerce anchors, the degree of investment is getting higher and higher, and some even live in the live broadcast room.
New jobs, new industries, new outlets, and perhaps the opportunities brought by domestic live e-commerce will one day be staged overseas.
Wen | Shi Yi
Editor| Zhao Xiaochun
Figure | Unsplash