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The rise of TikTok shop as a tier-one marketplace 
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TikTok Shop has emerged as a formidable player in the world of social commerce,  challenging established platforms such as Facebook, Instagram, and YouTube. The platform’s swift ascent has captured the attention of online sellers and industry observers alike. Sarah Znideric, VP of Global Partnerships at Linnworks, discusses the rise of TikTok Shop, some of its biggest success stories, and its potential to compete as a genuine tier-one marketplace…

TikTok Shop Success Stories

TikTok Shop’s success stories are nothing short of remarkable. From humble beginnings, some sellers have experienced exponential growth using the platform. One strong example of this is the case of Nature Spell, a hair and skincare company, which started with just a few orders a day and eventually peaked at around 9,000 product orders daily.

Other success stories on the platform have included Maters & Co, which received more than 100,000 orders for its pure honey products in its first year on the platform, and the influencer Cariad Ryan, who, as an affiliate, sold £90,000 worth of TikTok Shop products in four hours on Black Friday last year. These achievements demonstrate how TikTok Shop can help to translate ‘hype’ into real world success, and drive substantial sales and visibility for businesses.

The Diversity of TikTok Shop Products

The platform caters for a wide range of product categories, including beauty, fashion, homeware, pet care, food, refurbished tech, and books. While beauty and fashion products have seen perhaps the biggest success, sellers from diverse industries have also found sales success on TikTok Shop. And this success is driven by the platform’s inherent blend of community, entertainment, and shopping, which have contributed to its widespread appeal.

The Strategic Timing of TikTok’s ecommerce Move

Combined with the product offerings on the platform, the launch of the platform itself seems well-timed. In a similar vein to eBay’s growth trajectory 20 years prior, TikTok benefits from a mature infrastructure, ensuring a quick and natural expansion. TikTok’s commitment to ‘community commerce’ sets it apart, providing the app’s users with an immersive shopping experience from within the TikTok app.

Gaining New Customers on TikTok Shop 

The platform has proven effective in helping retailers to discover new customers without cannibalising their existing traffic. Often, TikTok Shop attracts an entirely different audience, or engages with customers that might not have otherwise made purchases on different marketplaces and platforms. The relatively fast sign up process, combined with the platform’s small commission fees ranging from 1.8% to 5% on sold products, have provided a cost effective and convenient revenue stream for sellers.

The Key to Success on TikTok Shop

While it is possible to simply list products on TikTok Shop, sellers that embrace a TikTok-centric approach will reap the most rewards, creating engaging and native content that aligns with the platform’s entertaining nature. This emphasis towards creativity extends to becoming a creator on the platform itself, where regular posts can generate a significant and engaged following. And for those that may be more camera shy and reluctant to get involved in this way, it is possible to leverage TikTok’s community of influencers to achieve an alternate method of product promotion, often in exchange for an affiliate promotion.

The Future of Online Marketplaces

The arrival of TikTok Shop represents a paradigm shift in online marketplaces, and provides a vibrant, community-driven shopping experience that promises a dynamic future for retailers. Its unique approach, coupled with a commitment to ‘community commerce’, positions TikTok as a formidable player in the evolving ecommerce landscape.

The increasing popularity of TikTok both as a social media platform, but also as a new online marketplace, presents online retailers with a compelling opportunity to take advantage of what is a uniquely diverse and engaged audience. The platform’s success stories, diverse product offerings, and commitment to community-driven commerce make it a strong contender for tier-one marketplace status. As the future of online marketplaces takes shape, TikTok Shop stands at the forefront, inviting savvy retailers to embrace the changing face of ecommerce.

Photo by Solen Feyissa on Unsplash

TikTok ‘needs to build trust’ and double down on data security to make headway in e-commerce
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To prove itself as a legitimate ecommerce platform, TikTok must gain regulatory trust and ensure the safety of user data, say analysts at GlobalData.

Short video app TikTok, owned by ByteDance, is set to compete with the likes of Amazon, Shein, Sea Group’s Shopee, and Alibaba’s Lazada, with its live streaming ecommerce business. However, its new initiative comes at a time when the company is under scrutiny over data privacy concerns in the US and Europe.

Pinky Hiranandani, Principal Analyst at GlobalDat, said: “Security and trust are vital for ecommerce transactions. TikTok must implement strong security measures to protect user data from unauthorized access, including end-to-end encryption of sensitive data and complying with the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the US. Also, the upcoming Digital Services Act in the EU requires platforms like TikTok to limit disinformation and better protect children online.”

TikTok Shop, the company’s ecommerce platform, which allows users to discover and purchase products directly from TikTok videos, has gained popularity in the Southeast Asian market backed by its large and engaged user base. In 2022 alone, TikTok Shop expanded to Malaysia, Singapore, Indonesia, the Philippines, Vietnam, and Thailand.

While its main focus will be on markets such as Indonesia, TikTok is planning to expand its ecommerce business in the US and the UK. However, the company is already facing setbacks in the US and Europe (the UK, Denmark, and Belgium), with lawmakers banning the app on government devices. In May 2023, the state of Montana made the landmark move to ban the app completely. Although such bans may not prevent TikTok or any other social media company from accessing a user’s personal data, having a comprehensive federal data privacy law in the US will help.

Hiranandani continued: “Moreover, competition in the ecommerce space, especially in the US, is intense given the scale and reach of domestic giants such as Amazon and Walmart. TikTok aims to build on its massive user base and partnerships with brands and influencers to drive ecommerce sales. It is attempting to mimic Amazon by producing in-house products and building a sales pipeline, as well as charging vendors a commission to showcase products on TikTok Shop. However, the Chinese company will require significant investment in its platform and infrastructure to compete with its rivals.”

Image by Kon Zografos from Pixabay

TikTok Shop: What is it, is it right for me and how do I set one up?
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The recent launch of TikTok Shop is something that all eCommerce businesses should take notice of. The platform has a huge, captive audience and a massive impact on buying habits, and TikTok Shop now makes it even easier for retailers to capitalise on this.

James Khoury is CEO of leading fulfilment provider, Zendbox, and an eCommerce Expert. He has released comments to help eCommerce businesses understand more about TikTok Shop and how to best utilise the new social commerce platform…

What is a TikTok Shop?

“With over one billion monthly users worldwide, TikTok offers an incredible opportunity for businesses to reach a huge and highly engaged audience.”

“The recent launch of TikTok Shop now allows eCommerce stores to list their products within a Shopping tab on their profile, so customers can browse and buy items all whilst staying on the app.”

“Essentially, the new social commerce offering is a way for brands, creators and eCommerce businesses alike to sell their products directly to consumers on the growing platform, cutting out a key step in the customer journey. Products can be showcased via regular and engaging stories, live streams or videos.”

“The launch of TikTok Shop is huge news in the eCommerce space. It provides sellers with another avenue to expand their customer base and sell products, and encourages brands to produce fun and engaging content to entice viewers.”

Should I set up a TikTok Shop?

“With social selling now generating billions of pounds in revenue, setting up a TikTok Shop is a no-brainer for any eCommerce store. Whether you want to capitalise on a preexisting buzz around your products on the app or start to create more noise about your brand and thus sales, TikTok Shop could be the answer.”

“Additionally, if you’re looking to pursue influencer marketing, TikTok Shop is a great avenue to explore. The platform allows you to partner with affiliates who will create content for you, making it even easier to set up and utilise content creators.”

“TikTok does have certain stipulations for sellers; for example, if you’re a creator selling your own goods, you need to have over 1,000 followers, have posted and had over 50 video views in the last 28 days and be over 18 (Source: TikTok).”

How do I set up a TikTok Shop?

“If you haven’t got an account already, you will first need to set up a TikTok profile. Ensure that you optimise your profile with a relevant bio and profile picture in line with your other social media branding.”

“TikTok has four main categories you must fall into to set up a TikTok Shop. These are sellers, creators, partners and affiliates.

  • “Sellers” are typically existing brands or eCommerce businesses.

  • “Creators” are people on TikTok who create content for fun but can be paid by brands to sell for them.

  • “Affiliates” allow brands to partner with influencers who actively sell their products and earn a commission.

  • “Partners” are businesses that work with brands to make selling even easier.”

“Decide which category you fall into before setting up your shop. It’s incredibly easy to set up as a seller. Just fill in TikTok’s online form and provide the right paperwork. TikTok will confirm your account has been opened and then you can link your TikTok account to your shop and start selling.”

How can I optimise my TikTok Shop and increase sales?

“To get your products seen, it’s important to make relevant content to get in front of your target audience. TikTok works by showing content to its users that they have historically shown an interest in. This means that if your videos are reaching people, they’re most likely already engaged in the topic that you’re creating content around. To capitalise on this, analyse which of your videos work well and the topics that are performing best, and keep producing content with the same themes.”

“To further optimise your TikTok shop, you can leverage TikTok’s promotional tools such as flash sales, coupons and free shipping. You’ll find these in the seller centre.”

“Make sure you’re using popular hashtags. For instance, #TikTokMadeMeBuyIt has over 18 billion views so far and clearly gets in front of a lot of viewers.”

“You can use the TikTok seller centre to easily keep track of products, adding new ones and checking sales. Linking with creators gives you access to their followers and provides you with new content you don’t have to spend time creating either. Read up on ways to optimise your actual content, including things like trending audio, ideal video lengths and popular filters.”

“You can also use the TikTok Shop partner feature to maximise sales. Using professional companies like 3PL providers to take care of things like packaging, shipping, or warehouse costs gives you more time to create content and chase sales.”

Are there any warnings or considerations I should be aware of when creating a TikTok shop?

“When you first sign up and set up your TikTok Shop, TikTok reduces their commission to 1.8% for the first 90 days. After this, the standard rate of commission is 5%, so be sure to factor this into your accounting.”

“You’ll need to set up a business account to get the most out of your TikTok Shop, which will give you access to metrics, paid ads and user-generated content (UGC). It’s important to note that UGC can cut marketing spend; it is trusted by users and can grow sales, but you will want to make sure any user-generated content aligns with your brand and is positive.”

“TikTok is an incredible platform for growth and is still relatively new so we can definitely expect to see increasing opportunities coming from it. Stay up to date with changes and trends and do your research. Duets, hashtags and giveaways are just some of the things you’ll get familiar with when you set up a TikTok Shop. Be prepared to learn fast and react quickly; if you can do that, the rewards will be well worth it”.