It is no secret that TikTok has evolved from being just an entertainment app into an advertising and sales platform as well. Do you know what the current status of e-commerce implementations on TikTok is?
We have summarized some facts on the e-commerce developments on TikTok and its Chinese sibling Douyin (抖音) for you:
• The e-commerce business of TikTok achieved around USD 908 million in gross merchandise value in 2021 and the owners plan to double it to roughly USD 1.8 billion in 2022. Douyin, the Chinese version of the app, reportedly had a USD 58 billion GMV in 2021.
• ByteDance initiated a major e-commerce push in China last year through Douyin, launching its own mobile payment service Douyin Pay and creating a shopping app together with the Alibaba Group called Douyin Box.
• The testing of online retail features also started outside of China in 2021. ByteDance launched an app for sellers on TikTok that helps businesses manage their digital stores and partnered up with e-commerce giant Shopify to allow users in the US and Britain to buy goods directly through the app. In February 2022, TikTok Shop also entered the Thai, Vietnamese, Indonesian and Malaysian markets.
• China’s Ministry of Commerce states that the country’s cross-border e-commerce imports and exports climbed 15% to USD 295 billion in 2021. And cross-border e-commerce trade already reached USD 65 billion in the first quarter of 2022. The Douyin strategy to achieve the greatest possible success in this field right now is to continually reduce the growth of foreign flagship stores and get international names to join the Douyin platform directly in order to open an official flagship store right there—this creates a closed-loop cross-border business.
Clearly, e-commerce is big on ByteDance’s agenda and more and more ideas are being put into practice to simplify shopping through the app.
Analysts expect TikTok to transform into the newest major cross-border e-commerce platform for mainland Chinese merchants selling abroad. China's total cross-border e-commerce market reached USD 313 billion in 2021. This is a significant growth that is pushing the company to develop viable platforms for Chinese merchants to generate more consumers overseas. ByteDance is trying out a lot of different models right now and is continuously improving its services in the field of cross-border e-commerce while monitoring merchant accesses through their own systems.
While it is already relatively easy for Chinese merchants to sell overseas via TikTok, the doors are opening in the other direction as well: Recently the "Global Optimal Imported Supermarket" was launched, which allows international brands to enter and sell in China directly through Douyin, adding one more way for sellers to break into the Chinese market besides opening a flagship store.
TikTok is a little later to the game, given that Facebook, Instagram, Pinterest, and Snapchat are already established social commerce apps with a variety of social retail integrations. But TikTok is here at a time when social commerce is really flourishing and the app has one major advantage: greater loyalty among Gen Z and millennial audiences than its competitors. Another thing that is extremely important to bear in mind is that TikTok is setting the trends that spread to other platforms. Everything revolves around short, fun video content that is authentic rather than overtly promotional right now—and it all started on TikTok. We’re sure that online retailers around the world soon can profit from this business model that merges the most popular elements of social media and e-commerce.
For brands, it is not only worth a closer look but also a try to be part of it at an early stage. Right now, it is worthwhile for companies selling in China to look at all the Douyin options and identify potential. And for brands targeting other markets to follow every new development on TikTok and act quickly to attract and convert key target groups.