After more than a year of low-key racing, ByteDance's overseas e-commerce map showed signs of contraction for the first time.
Last week, women's cross-border e-commerce site Damonstudio issued a brief announcement announcing that it would stop operating from February 11, but would continue to provide after-sales service for consumers who had already shopped. The announcement did not give any explanation as to the reason for the outage.
Public information shows that the operating entity of Dmonstudio is Guangzhou Chuangxing Media Technology Co., Ltd., which is not directly related to Byte. However, Interface News quoted people familiar with the matter as saying that Dmonstudio is actually an S-level project incubated by Byte, reporting directly to Kang Zeyu, president of Douyin E-commerce.
Dmonstudio went live last November. According to the official website, this website is mainly for the European, American and Middle Eastern markets, updating more than 500 women's clothing every week, shipping through overseas warehouses, and it is said that it has millions of users. This set of gameplay is highly similar to the domestic cross-border e-commerce giant SHEIN.
Byte has been coveting e-commerce for a long time. According to a previous report by Late Post, Zhang Yiming set three new business directions for Byte in early 2021, including cross-border e-commerce.
In the past year, Byte has frequently fallen in the overseas e-commerce market, walking on two legs, trying to find the most appropriate way to play.
One of the legs is a relatively independent project, and it is mainly Fanno and Dimstudio that are currently being exposed. The launch time of the two products is close, the former accepts third-party merchants to settle in, mainly for Europe; the latter is a platform selection, sold to more national markets.
But less than four months later, The B2C model of Dimonstudio suddenly shut down, marking a temporary retreat of Byte E-commerce to the old road of only doing business platforms and traffic distribution.
The other leg is the TikTok e-commerce, which includes both diversion to third-party independent stations and the TikTok Shop business, which has just launched for more than half a year. Compared with Fanno, this business is much louder and more vocal, and can be called the flagship of byte's overseas e-commerce sector.
Among them, live streaming with goods is the core gameplay of TikTok e-commerce.
In July and August 2021, TikTok began to test the waters in Indonesia and the United Kingdom, using an invitation system in the early stage, but opening registration in less than three months. Currently, TikTok plans to expand this business in Southeast Asia, including Vietnam and Thailand.
A cross-border e-commerce practitioner revealed to the alphabet list that when a merchant applies to sell goods in TikTok, the platform staff will first ask whether there is a live broadcast ability, and then ask if they can do a short video, which shows the importance attached to live streaming with goods.
This can't help but be reminiscent of the growth path of Douyin e-commerce. In the initial stage, Douyin mainly does traffic business, diverting e-commerce such as Taoshi and JD.com, allowing commodity links to be hung in short videos or live broadcast rooms; but with the improvement of its own e-commerce operation capabilities, as well as the launch of small stores, shopping carts, Douyin payment and other tools, Douyin gradually adjusts the external link policy and seeks a closed loop in the station.
Previous analysis articles believe that the development model of TikTok e-commerce will be highly similar to that of Douyin, and it is also necessary to create a head big V like Luo Yonghao to drive the prosperity of the entire live streaming with goods.
However, in the eyes of many e-commerce people, TikTok is still in the stage of testing various models. When participating in global competition, it faces a far more complex user group and regulatory environment than in China, and must be extra cautious and cautious, and the speed cannot be too fast; the way to play by throwing huge resources on one or two top celebrities and seizing market opportunities is not suitable for overseas markets.
A
At present, TikTok's live streaming has just started, mainly in Indonesia and the United Kingdom, and mainly self-broadcast by merchants. This is very different from the model of professional anchors and merchants on Douyin.
Zhang Xinxin (pseudonym) is a cross-border e-commerce entrepreneur whose company mainly sells jewelry and electronic products to the British market, and in September 2021, she registered and opened TikTok's live streaming, and was one of the first merchants to try it out.
But for the first month or so, the data in the live broadcast room was very bad, with few viewers and a very low conversion rate. Zhang Xinxin believes that this is due to the lack of accurate traffic on TikTok, and the traffic distribution is more and less, resulting in merchants not being able to find the pulse of the platform.
"For example, the live broadcast room is showing women's products, but the users who come in are men; or they are displaying electronic products, but female users come in." She said.
It was not until November last year, with the arrival of "Black Friday" and the Thanksgiving and Christmas holidays, that Western countries entered the year-end shopping season, and the business of the live broadcast room gradually improved.
During this period, TikTok gradually increased the operation of live streaming with goods, launched a large-scale live broadcast ranking competition, ranked merchants according to indicators such as live broadcast duration, GMV (total commodity transactions), and provided rewards such as price subsidies.
On the other hand, after a period of exploration, merchants have more experience in how to bring goods on TikTok live, and the live broadcast room has slowly gained heat. "Users come in one after another, look at products, ask prices, and interact with anchors," Zhang Xinxin said, "Consumer cognition has changed a lot, and the turnover rate is also very high." ”
In order to attract more merchants to enter the broadcast, TikTok has issued some support policies, including free shipping, commission-free and so on.
At present, when shipping overseas, domestic merchants can be responsible for their own logistics and distribution, or they can choose TikTok cooperative logistics, including the cross-border logistics service provider Vertical Network in Which Byte invested in August last year.
According to Zhang Xinxin, after the merchant chooses the logistics service officially provided by the platform, TikTok will arrange personnel to pick up the goods and be responsible for domestic and international logistics and distribution. Taking the small parcels sent to Europe in China as an example, each order can save the merchant 40 to 50 yuan in freight.
On the other hand, TikTok offers a commission-free policy for new live streaming merchants, where merchants only need to bear a 1.8% payment fee. Users can pay through third-party payment instruments such as PayPal.
However, over time, the discount on the merchant side of TikTok is also gradually weakening.
Since August last year, TikTok has offered free shipping for any order over $1; however, since this month, the free shipping standard has been raised to $3.
From the perspective of transaction amount, TikTok live streaming is still in its infancy. During Christmas last year, some merchants started broadcasting for $50,000 an hour, and it is expected to reach $200,000 throughout the day, which has become a hot topic in cross-border e-commerce circles for a time. However, this achievement is obviously not the same as the domestic single-day turnover of hundreds of millions of dollars.
At the commercial level, TikTok hasn't had much to do yet. It does not officially sell all kinds of advertising slots, nor does it encourage merchants to purchase traffic promotion products within the platform.
Zhang Xinxin believes that in the long run, TikTok will sooner or later make up for this piece of business like other e-commerce platforms; but at this stage, TikTok's focus is to establish the ecology of live streaming with goods, on the one hand, to screen out high-quality merchants, on the other hand, to precipitate more accurate user portraits, paving the way for the future provision of marketing services.
B
At present, live streaming with goods is the highlight of TikTok e-commerce, but it has not been quickly rolled out, "copy and paste" in countries around the world, and the scope of promotion is mainly Southeast Asia.
There are factors in the short time for business to go online and the need to further polish the process. But the more important reason is that there are huge differences in consumption habits, purchasing power and Internet environment in different countries, and there are also geopolitics mixed with geopolitics, and TikTok's landing strategy also needs to be adapted.
According to public data, the Internet population penetration rate in Southeast Asia has reached 75%, of which the smartphone penetration rate in the six ASEAN countries (Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Brunei) has reached 100%. With the help of the mobile Internet, people have become accustomed to live broadcasting on mobile phones.
In this emerging market, TikTok has taken live streaming as the focus of promotion, and the effect is very remarkable. An interesting phenomenon is that TikTok has opened live streaming in Indonesia and the United Kingdom almost at the same time, but the business development in Indonesia is far better than that in the United Kingdom.
Some practitioners believe that this is related to the category of goods sold by TikTok. "Now merchants are concentrated in the four categories of beauty, home, clothing and consumer electronics, but Indonesia's tariffs on electronic products are very high, and everyone mainly does the first three categories." The prices of these goods can be made very low and in line with local consumption levels. But not in the UK, where something too cheap isn't necessarily easy to sell. ”
In the United States, TikTok did not introduce live streaming with goods, but adopted a more conventional path, by attaching external links in short videos, diverting traffic for merchants on third-party platforms.
Compared to the soaring market in Southeast Asia, TikTok is much more cautious in the United States. Even if it is diverted to other e-commerce companies, its movement is not fast.
A cross-border e-commerce practitioner revealed that at present, under the official invitation of TikTok, there are only 7 merchants who can mount links in short videos, all in the United States.
TikTok is reluctant to promote this business with great fanfare, and the low conversion rate is one of the important reasons. "Most of the goods that can sell explosive goods with links are small things of one or two dollars, and there is no order cost." Zhang Xinxin said, "The conversion rate of large-scale products is particularly low, such as videos with 1 million views, and the number of clicks and jumps is only 300 or 400." ”
This is directly related to TikTok's user profile. Half of TikTok's users are young people between the ages of 18 and 24 who lack sufficient consumer awareness and ability. In addition, in many countries, underage users cannot apply for a bank card, which makes it difficult to shop online, making it more difficult to convert sales.
On the other hand, TikTok video may suddenly explode because of a strange point, but the traffic it gathers lacks enough precision to drive sales. Content that has both value and can become a hit is very rare in TikTok.
The bigger challenge is that TikTok makes money in the U.S. and must take into account geopolitical factors. It has previously been suppressed by the Trump administration and is almost on the verge of "selling itself"; with Biden's rise to power, the pressure on TikTok has temporarily eased, but it cannot arbitrarily touch the basic disk of retail giants such as Amazon and Walmart in the United States.
Therefore, taking a step back and being a traffic wholesaler with peace of mind has become the best choice for TikTok to survive in the US market.
Back in October 2020, TikTok established a strategic partnership with Shopify, North America's largest SaaS (Software as a Service) e-commerce platform, where more than 1 million merchants can manage marketing campaigns on TikTok through Shopify's in-site tools. In August last year, the cooperation between the two sides was further expanded, and consumers can directly purchase some Shopify products on the TikTok station.
Liu Sijun, senior vice president of Dunhuang.com, believes that TikTok's cooperation with Shopify is a good move. "It can't put everything on its own. After Pulling Shopify in, if the U.S. government wants to ban TikTok, it must consider Shopify's interests. ”
C
When Chinese merchants do cross-border business, many people use Amazon as the most important channel. But over the past few years, they have repeatedly suffered from Amazon's bans and are in desperate need of a new platform.
In May last year, Amazon once again suspended its number on a large scale, and Chinese cross-border merchants became the hardest hit area, and many practitioners suffered heavy losses. Liu Sijun believes that some Chinese merchants are not very unruly, and have moved the play of brushing orders and controlling comments to Amazon, which is the direct inducement for this suspension.
Liu Sijun said that although Chinese merchants have contributed a lot of GMV, Amazon has never focused its strategy on them. "Amazon wants to be local merchants and local goods around the world; if the local supply is rich enough, then it will kill Chinese merchants without hesitation, but because China's supply chain is relatively strong, it can't do this for the time being."
On the other hand, many Chinese merchants are also "suffering for a long time". In order to ensure the shopping experience, Amazon requires Chinese merchants to stock up overseas and send orders directly to consumers after placing an order. This significantly increases the inventory pressure of merchants, and once it cannot be sold, it will increase the cost in vain.
In Shenzhen, where there are many overseas merchants, some people have realized this problem. They took the initiative to reduce Amazon's channel ratio, dispersing goods to other platforms to increase spot and reduce inventory; they were also more cautious in selecting products to avoid being too large and too wide.
On the other hand, foreign consumers' acceptance of soft implantation of commercial content is also increasing.
Founded by a group of Chinese students, Mespace, headquartered in Paris, France, began to undertake Ali AliExpress's brand promotion in France in 2020, mainly responsible for recruiting and organizing local talents to live stream goods on AliExpress.
Guo Jiyang, general manager of Mespace, told alphabet lists that the epidemic has made young people in France accustomed to online shopping, but live streaming is still a very new thing in the local area. The company cooperates with about 200 professional anchors, about 500 live broadcasts per year, and the number of views of the head anchor is about 30,000 to 60,000.
At present, TikTok has not yet promoted live streaming in France, but Guo Jiyang has paid attention to its actions in the UK. In his view, AliExpress is live to sell goods, but TikTok can do soft implants to stimulate consumer desire through content.
"Chinese merchants go to sea, and the traditional model is no longer easy to use." Social media is the only way to land. Guo Jiyang said.
He believes that the only problem for Chinese merchants to go to sea is cultural differences, and it is difficult to localize and integrate into the local mainstream market. "For example, when doing live broadcasting, merchants always like to emphasize promotions, discounts, limited-time purchases, etc., which will appear a little low." We should talk about it more according to French thinking. ”
It is worth noting that in the past one or two years, foreign Internet giants such as Amazon, Google, and Meta have also increased their live e-commerce.
Amazon began a small-scale test of live streaming in 2017 and launched Amazon Live, a live shopping service, in February 2019. However, the development of this business has been tepid, with less than 1,000 active users per day and only a few tens of thousands of promotion nodes.
Google-owned YouTube hosted a week-long live shopping event in mid-November, inviting two leading influencers with more than 6 million followers. Meta's picture social network Instagram began to test the waters of live streaming in August last year, while trying two ways of playing merchant self-broadcast and KOL with goods.
At present, the live streaming of the three giants can only be regarded as better than nothing. However, considering its huge user volume and financial strength, they may become an important opponent of TikTok to do live e-commerce.
Liu Sijun revealed that TikTok has clearly made it necessary to do three major sectors of entertainment, culture and e-commerce. In the matter of e-commerce, TikTok is still in the exploration stage for what role it will play. "They're struggling and haven't figured out what to do yet. After all, this is a big decision. ”
Compared with the surge of Douyin e-commerce, TikTok faces a more complex environment and undoubtedly needs to be more cautious. However, in the context of the gradual slowdown in the growth rate of Byte's domestic business, TikTok is bound to bear greater revenue pressure. In addition to the advertising business, TikTok also needs to complete the e-commerce exploration as soon as possible, and change from a gold-devouring beast to a cash cow as soon as possible.