Updated: 2022-11-19 16:20:14
Since the partnership with Shopify of launching TikTok shopping last August, TikTok has continued to venture into e-commerce, expanding its in-app shopping options.
According to Semafor report, TikTok quietly launched the much-discussed TikTok Shop feature in the United States last week, which means that now American merchants can apply to sell on TikTok shop. And this feature allows users to make purchases directly within the TikTok app, without linking to third-party websites.
Let's take a closer look at what TikTok is doing this time and what useful information you can get as an e-commerce seller or dropshipping seller.
Recently, the TikTok Shop seller center has quietly added an application portal for North American Seller, which was only available in the UK and seven Asian countries/regions before. And now, TikTok is starting to test in-app shopping in the US, the market with the largest number of users.
TikTok is inviting some select US businesses to participate in the testing, according to Semafor. In the future, it will be open to international merchants.
According to the registration site of TikTok Shop US, an invitation code is required for the application. Besides, Corporate sellers must provide a US certificate of incorporation to apply, while individual sellers need a US passport or driver's license. And applicants will hear back within a day or two after submission.
To ensure efficient order fulfillment, another important requirement of TikTok Shop US is that sellers must have local inventory in the US.
Someone familiar with the situation said that TikTok Shop US currently does not restrict product categories of these invited or voluntary sellers who apply to sign up, which is expected the same as TikTok Shop UK. That is to say, as long as the products have local inventory in the US and meet the requirements for registration, sellers can start selling.
TikTok is indeed a sizable e-commerce platform at this point, able to build an effective retail ecosystem (including in-app checkout, product tags, shipping, and returns, etc) around its ability to use hashtags like #TikTokMadeMeBuyIt to drive purchases.
This means that TikTok is no longer just a traffic platform that collects content and makes people watch novelties, but has developed into an e-commerce shopping platform.
And the US market has huge potential to support the launch of TikTok Shop.
TikTok occupies a relatively high position in the social media market in the US. It has the largest loyal user base of nearly 140 million in the US. And earlier, the Gen Z's Favorite Brands 2022 report released by Morning Consult also showed that TikTok has become Top 3 of the most popular brand list of the gen Z in the US.
This year, 102.6 million people in the US will buy via social platforms. And the US social buyers are spending more than ever. According to the latest data from eMarketer, US social buyers will spend $518 on average per person in 2022, a 26.9% increase from last year. eMarketer also predicts that in the next three years, the average annual spending per buyer will continue to see double-digit growth, reaching $937 in 2025.
At the same time, social commerce is exploding on TikTok, where social buyers are increasing rapidly. And TikTok is expected to add another 10 million social buyers this year, which will make it surpass Pinterest in terms of social buyers in the US.
According to eMarketer, 27.3% of TikTok users will buy on the platform this year, and that share is expected to increase to 38.6% by 2024. That would put it ahead of the 37.6% of users that Facebook buys on its platform.
These data undoubtedly also tell e-commerce sellers that TikTok has great potential for social e-commerce and it is a wise choice to bring your business as early as possible on TikTok!
Since TikTok does not have a fulfillment center and logistics infrastructure in the UK, TikTok Shop in the UK mainly relies on third-party merchants for self-delivery or cooperative logistics providers for delivery. Therefore, delivery efficiency is difficult to guarantee， receiving many complaints from users about the poor delivery experience.
Also, in the US, shoppers have long been accustomed to the efficient fulfillment of established e-commerce platforms such as Amazon and eBay. So, TikTok is bound to make up for its logistics shortcomings to compete with it.
In order to put forward TikTok Shop in the US more steadily, TikTok is planning to build its own product fulfillment center in the US, according to Axios. And over the past few weeks, TikTok has posted more than a dozen new job openings on LinkedIn related to its global fulfillment center, such as the merchant development manager and the logistics solution manager of the global fulfillment center.
These positions are mainly concentrated in Los Angeles and Seattle, which are responsible for the planning and design of its global fulfillment center, development, and improvement of its e-commerce global supply chain system, etc.
It means that TikTok Shop will build its own Fulfillment center in the United States to provide localized warehousing, delivery, and return services for e-commerce sellers to achieve rapid and sustainable growth of TikTok Shop.
Beyond that, TikTok has been working to highlight its live-stream shopping experience (launched for the first time in the UK ) to drive e-commerce engagement.
Through the partnership, TalkShopLive could reportedly provide TikTok with infrastructure and technology to allow creators to host live shopping on TikTok, while also giving brands the option to simultaneously broadcast the stream to their own websites. And TalkShopLive takes about a 10% commission from sellers for providing its services.
But the two companies are still finalizing the details of the cooperation and have not yet signed any contracts. TikTok wants to have a one-stop solution that can help manage the live shopping process, according to someone familiar with the situation, adding that the shopping feature is not expected to be launched until the holiday season next month.
Before the TikTok shop is officially open to all American merchants, Shopify merchants can still sell on TikTok through the Shopify TikTok sales channel.
If its live shopping feature can be launched by the holiday season, it will be an excellent opportunity for merchants, including dropshipping sellers, to boost sales!
All in all, TikTok is currently the fastest-growing platform in the world, and the successful business model of the combination of short-video content and e-commerce has been fully verified in China. And TikTok marketing has become popular all over the world. What TikTok brings are both opportunities and challenges for e-commerce sellers.
What you need to consider now is not whether to use TikTok for your business, but how to make the most of TikTok!