Is TikTok going to sell more cheap Chinese goods to Americans than Shein and Temu?
There are a lot of politicians and others who would just like to see TikTok go away. Shopping apps Shein, Temu and others may come to share the same sentiment if TikTok is able to get its online marketplace operations up and selling to a significant percentage of its 150 million active monthly users.
A Wall Street Journal article from earlier this week reported that the video-sharing app and platform will launch the TikTok Shop Shopping Center in August to enable Chinese firms to sell their clothing and other goods directly to Americans with TikTok handling warehousing and fulfillment of orders.
The Shopping Center will put TikTok in direct competition with Shein and Temu's marketplaces as as those operated by other retailers and platforms. The Journal reports that TikTok is looking to generate $20 billion globally this year in gross merchandise value, up from $5 billion in 2022.
It will also be interesting to see if a successful launch of TikTok's marketplace has an effect on the haul videos presented on the app. Research by Morning Consult found that 42 percent of Gen Z Americans between 13 and 25 have purchased a product after seeing a haul video. Shein and many other retailers have enjoyed the sales boost that they have received from these videos, which are typically produced without financial compensation.
领英推荐
There is a clear potential for TikTok to become an online retail force but there is also the reality that it has been challenged getting its streaming commerce efforts off the ground, The company also operates knowing of the potential threat from legislators or regulators to significantly curtail its ability to do business in the U.S.
Montana in May passed SB 419 that prohibited the use of TikTok on state-owned devices beginning on June 1. The law prohibits either Apple or Google's app stores from allowing downloads of TikTok beginning January 1 even though both companies have said they are unable to confine downloads to that state alone.
TikTok filed a federal suit against Montana claiming that SB 419 infringed upon the company and its users' First Amendment and other constitutional rights.
YODA RETAIL | RETHINK Retail Top Expert 2024 | Leadership Development | Merchant | Transformation & Change Coach | Retail Pioneer - Mad Man Era to Today |
1 年George Anderson TikTok is like crack. Amazing platform for entertainment, what a sales opportunity!
Visiting Professor @ University of Sanya | International Business Expert
1 年TikTok surely has the reach, but opening a marketplace takes an entirely differnet level of skill. If developing a strong relationship with Shien and Timu is not an alternative and TikTok has the patience and resources, then why not go for it? They have 1.7 billion users worldwide and that doesn't include Douyan, its sister app in China. Even with the possible challenges they have in the U.S., TikTok has a formidable foundation to expand its business.
We certainly have seen moves in this direction and TikTok is constantly testing and iterating this experience in their app. Watchful.ai has been able to identify some pretty cool cross-platform tests that can lead directly to revenue for them within shopping. For instance, visual search within the app. https://www.adweek.com/social-marketing/tiktok-shop-is-testing-visual-search/
Global Director, Retail Strategy at CI&T RETHINK Retail Top 100 Influencer RetailWire BrainTrust Expert #culturetocommerce
1 年The thing TikTok does have going for it is its direct line to consumers. Its reach is broad, and it's a trustworthy platform for consumers when shopping since they go there so often to learn about new brands.
Even though TikTok’s wide reach makes it a formidable force, it faces political, process, and technological headwinds to become a retail giant.