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tiktok shop

TikTok Shop Is Going to Be The Third Largest eCommerce Platform after Amazon and Shopify

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TikTok is going to make its own eCommerce platform

In the past half a year, TikTok has integrated with Shopify, and attracted millions of independent merchants, developing a video shopping feature. In quick succession, it tried live-streaming sales with Walmart. In February 2021, TikTok launched a shopping cart function during live-streaming in Indonesia as a trial. TikTok’s eCommerce expansion project-TikTok Shop is also in full preparation.

TikTok Shop has taken the lead in launching TikTok Shop Seller University for Indonesian sellers. According to the explanation from the official website, TikTok Shop Seller University is a training center that helps sellers develop business on TikTok. It mainly provides a full set of courses on seller tools, platform policies, and store updates.

The number of users has increased geometrically, the app version is updated frequently. And the commercial features are taking a larger proportion-this is the developing trend of TikTok in the past two years. In 2019, TikTok’s global user base increased by 267% compared to 2018. In 2020, TikTok surpassed Facebook in one fell swoop, becoming the most downloaded app on iOS and Android platforms in 2020.

At the same time, TikTok’s commercialization path has become increasingly clear, and it has rapidly developed from a paid advertising platform to an eCommerce platform. According to the strength evaluation of ByteDance, the company that owns TikTok, TikTok is going to be the third-largest eCommerce platform after Amazon and Shopify.

TikTok is no longer just a paid advertising platform, it’s developing into an integrated eCommerce platform

Regarding advertising business in overseas markets, Facebook made about $84.2 billion, and Google made about $146.9 billion in 2020. In comparison, TikTok’s market share is still small, but the prospects are very impressive. With the rapid growth of user numbers, TikTok is bound to pose a threat to other eCom giants, and TikTok’s eCommerce layout is an important signal. 

Previously, TikTok’s commercialization was mainly divided into open-screen advertising, challenge, and information flow. In December 2020, it launched a “pod” function (a kind of pay-to-buy traffic feature for personal accounts) in Japan, Indonesia, and Thailand. In terms of eCommerce, since the cooperation with Shopify in October 2020, a small number of accounts have opened up the purchase link.

In addition to the trial launching the shopping function in the United States, at the beginning of 2021, the shopping cart function for Indonesian live video has been launched, which can be redirected to Southeast Asian eCommerce platforms such as Shopee. It is said that the shopping cart function will be fully launched in Q3 2021. TikTok and Shopify cooperated only for merchants in the US now, but it should be open to merchants in the UK and other European stations in the near future.

The launch of TikTok Shop is obviously an important milestone for attracting more players to participate in the in-app eCommerce function. In addition to linking products on external eCommerce platforms through shopping carts, merchants can also open stores directly on TikTok (currently only for Indonesian sellers).

According to the official tips of TikTok Shop Seller University, merchants who joined TikTok Shop can upload product information, receive orders, complete sales and process payments, track and manage orders, and process refunds in the background. The seller needs to provide:

  • Personal detailed information such as location, phone number, and email address;
  • Basic business information such as store name and warehouse address;
  • Business registration information.

After being qualified for sales, merchants can operate and manage product lists and orders in the seller center. After registering as a TikTok Shop merchant, your TikTok account will automatically be converted to a corporate account. The TikTok Shop button will be displayed on the second tab of the account profile page. Click to enter the store to view all products.

TikTok Shop currently has a relatively complete set of product sales specifications, including registration methods, intellectual property policies, prohibited product categories, restricted product categories, product shelf specifications, order transportation specifications, store content guidelines, and return refund specifications.

For example, TikTok Shop prohibits the sale of drugs, medical devices, food, alcohol/tobacco, and other related products, and some products such as jewelry, watches, and accessories must obtain TikTok category approval before being sold.

TikTok Shop Seller University website

At present, merchants can sell goods on the TikTok platform in two ways: one is to sell through a personal page, and the other is to find celebrities to promote the goods through the TikTok affiliate.

Merchants can sell products through their personal pages and display product links in short videos and live videos. Other users can click the shopping link to enter the detailed information page of the corresponding product when viewing the video content or watching the live videos.

In addition, the TikTok affiliate program allows merchants to cooperate with KOLs on the platform to promote products. Merchants can upload product information to the seller center and set up a promotion plan. They can also view the KOL list and their specialties through the TikTok Creator Market, and select the appropriate KOL for cooperation. 

TikTok Shop dashboard

According to the official website of TikTok Shop Seller University, TikTok currently charges TikTok Shop sellers a fee of 2% of the transaction volume of each order. In addition, TikTok or its affiliates will also provide merchants with delivery and payment services and charge service fees.

TikTok affiliate plan 

TikTok Shop will be a strong competitor of Amazon, Facebook, and Shopify

TikTok officially entered the international market in August 2017. In July 2018, TikTok announced that it has become the most popular short video application in Japan, Indonesia, India, Germany, and other countries. By the end of 2019, TikTok had become the second most downloaded app in the world.

By the end of 2020, TikTok surpassed Facebook in one fell swoop and became the world’s most downloaded app on iOS and Android platforms. The number of active users has tripled compared to 2018. It is expected that by 2021, the number of monthly active users will exceed 1.2 billion.

This fever of TikTok has also forced established social media platforms such as YouTube, Facebook, and Snapchat to launch similar short video functions in 2020.

In terms of eCommerce, TikTok is trying to build a third-party market that is more complex than Facebook Shops. Moreover, TikTok has excellent genes in the field of short video and firmly captures the millennial generation and the Z generation. This is the future trend, and it is precisely what Facebook needs to be afraid of.

It should be noted that TikTok’s eCommerce layout will have an impact on the original stable, clearly-defined eCommerce market around the world.

In the global eCommerce market structure: Amazon occupies the dominant position of platform eCommerce. Shopify grows independent station ecology, and traffic platforms such as Google and Facebook provide eCommerce traffic portals.

The ecological pattern of platform eCommerce, independent stations, and social media is relatively stable, and the boundaries between them are clear. The emergence of TikTok has accelerated changes in the global eCommerce market.

As a diversified content platform, TikTok is not only to divers eCommerce, but also to plan its own eCommerce platform. TikTok Shop may be a prototype. Moreover, in TikTok’s eCommerce plan, participants are not only commodity buyers and sellers-countless content creators/KOLs are forming new fragmented traffic portals, that is, distribution channels.

In other words, TikTok makes the boundaries between content, social, and eCommerce no longer clear, and it is a combination of these three types of platforms.

In the global eCommerce market, what is different from China is that there are more independent stations promoted by Shopify in this situation. But this does not affect TikTok’s “big fusion” and “big spoiler” expansion-it can form competition with any eCommerce player. Therefore, you can see that on one hand, it cooperates with Shopify to absorb all kinds of scattered independent stations that exist in individual forms. And on the other hand, reaches out to eCommerce platforms such as Wal-Mart. At the same time, it still has a lot of room to build its own eCommerce platform. To

TikTok has formed an in-app eCommerce ecological closed loop in China, and for TikTok, TikTok’s eCommerce development path can be reproduced, and the imagination is much greater. In the long run, TikTok will become a major challenger for large global social media companies, advertising companies, and even eCommerce platforms.

How can online sellers seize the opportunity?

The launching of TikTok Shop is no doubt an opportunity for online sellers.

On the one hand, it is a new eCom platform compared to Amazon and FB+Shopify, the competition will not be too fierce, and it’s much easier for beginners.

On the other hand, sellers have more choices. When you can’t make a success with Shopify, maybe you can scale up with TikTok Shop. And with TikTok Shop entering the eCommerce platform competition,  other platforms like Amazon, eBay, FB Ads, and Google Ads may probably adjust their strategies, and lower the ad fees to seize more market share.

Enter the game before other players do.

For almost every industry, the earlier you enter the market, you have natural advantages over late-comers: less competition in the market, and enough time for accumulation.

Make market research

Unlike Facebook, where the users are from all age groups, and the average age of FB users grows every year, most users of TikTok are young people. So it’s quite important to make a market research before you enter the market, like what sells well among young people, and the winning products on TikTok China.

Find a reliable supplier to fulfill your orders

Now TikTok is not able to provide order processing and shipping services, and it doesn’t seem like developing the service in the near future, to find a supplier who supports product sourcing, order processing, and worldwide shipping helps a lot with scaling up your business. CJdropshipping is currently the best auto-order fulfilling platform with cheaper products than AliExpress and faster shipping times.

How can I start & scale with TikTok × CJdropshipping?

CJdropshipping is an integrated dropshipping platform that offers dropshipping services like auto order fulfillment, product sourcing, warehousing, parcel shipping, and the like. You don’t have to source & pre-stock products, pack, or ship the order, all you have to do is marketing and customer service.

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CJ Dropshipping
CJ Dropshipping

You sell, We source and ship for you!

CJdropshipping is an all-in-one solution platform that provide various services including sourcing, shipping, and warehousing.

The goal of CJ Dropshipping is to help international eCommerce entrepreneurs to achieve business success.