Specifically, TikTok will start selling Chinese goods directly to US consumers from August this year – just in time for the holiday season. Their offering will also include shipping and storage, as well as marketing, transactions, after-sale services, and other logistics. While the new venture is only directly affecting the US market for now, European brands and consumers would do well to pay attention to how this could potentially reshape the ecommerce landscape across the region.
The driving force that is the #TikTokMakeMeBuyIt phenomenon
In case you’re not already familiar, the #TikTokMadeMeBuyIt trend is massive and it’s one worth understanding. If TikTokers aren’t talking about their purchases or consumer experiences, they’re listening to other people talk about theirs. The setting is similar to how a friend or a neighbor would talk to you about something in your living room, except online and (mostly) with strangers. Anyone who still thinks TikTok is only good for silly dance routines and pet videos needs to crawl out from under their rock. In fact, for an increasing mass of people, TikTok isn’t even used just as a social media platform anymore; it’s also a search engine. Even Google recognizes it:
“In our studies, something like almost 40 percent of young people, when they’re looking for a place for lunch, they don’t go to Google Maps or Search. They go to TikTok or Instagram,” Prabhakar Raghavan, a Google senior vice president, said at a technology conference in July.
All this to say, TikTok videos can be powerful. A random girl in her car who’s casually talking about a headband that pulls your hair back in the way that sunglasses pull your hair back, but without actually being sunglasses, might seem ridiculous to many. But this is exactly the kind of content (5.9M plays, btw) that cements creators as influencers with profitable careers, puts businesses on the market and skyrockets sales, influences hundreds of thousands of users’ purchasing decisions, and feeds directly into the #TikTokMadeMeBuyIt trend that has motivated this $200bn company and the world’s most valuable unicorn into shaking up the eCommerce industry.
TikTok Creator: @sophiacuerquis
Link to Full Video: https://bit.ly/3Khek4l
The most successful of these “mini reviews” are informal and unsponsored, which adds a sense of credibility and trust – both for the creator and the brands they talk about. When creators are covering sponsored or gifted products or services, they’re still known (or at least expected) to be brutally honest. Many even buy products that are notoriously “bad”, just so they can talk about it. However, for whenever creators aren’t coming across as honest, users will not hesitate to come for them in the comments or via video reactions, sharing their own experiences with each other, keeping the creator’s statements in check, and “comparing notes,” so to speak. Basically, a TikToker could casually rave about a product in one minute, and the next thing you know it’s viral. This is the essence of the #TikTokMadeMeBuyIt trend.
With TikTok venturing into direct sales and aiming to capitalize on the #TikTokMadeMeBuyIt phenomenon, the company is leaning on their massive user base. Leveraging their treasure trove of user data, TikTok can translate real-time insights into consumer preferences, providing a significant advantage in selecting products to stock on its platform. By taking control of the end-to-end consumer experience from product discovery all the way to product delivery, TikTok also aims to ensure “authentic” promotions, protect users from counterfeits and scams, and foster goodwill among its growing customer base.
The Impact of TikTok’s eCommerce Offering on the European Market
For European brands, TikTok’s entry into ecommerce presents both opportunities and challenges. On the plus side, the platform’s popularity among younger consumers opens up new avenues for brand exposure and market reach. By leveraging TikTok’s influence, European brands can tap into a younger and more digitally-savvy demographic, as well as creating trending marketing campaigns that can potentially drive sales and brand loyalty.
However, competing in this new ecosystem comes with its own set of hurdles. Scaling an ecommerce business is an intricate task that demands significant investments in supply chain infrastructure, warehousing, and logistics. While TikTok could be outsourcing these capabilities to third parties, it remains to be seen how efficiently they can execute the process. Relevant third-parties would do well to stay alert for potential partnerships.
European consumer brands looking to partner with TikTok may also face concerns about data privacy, given the platform’s past controversies regarding sensitive data storage. We see a similar story with Threads, which has been made available virtually everywhere except Europe and with no foreseeable launch date in the region as yet. The app has been held up by what Meta spokesperson Christine Pai described to The Verge as “upcoming regulatory uncertainty,” likely referring to the EU’s strict data privacy policies and regulations.
For European consumers, TikTok’s eCommerce entry introduces fresh possibilities for discovery and shopping. As more products become available on the platform, consumers can anticipate diverse options that cater to various tastes and preferences. The interactive nature of TikTok’s content can foster a unique shopping experience, where consumers can engage with creators, seek recommendations, and participate in trends that influence their purchasing decisions.
However, once again, concerns over data privacy and trust in social media platforms may put a dent in consumer enthusiasm. European consumers, like their American counterparts, may be wary of sharing personal information on a platform known for its viral content and data handling controversies. TikTok needs to work extra hard to address these concerns, assuring consumers that their data is protected, respected, and secure.
Is a TikTok Takeover on the Horizon?
TikTok’s entry into the ecommerce space is a bold move that has the potential to reshape how European brands engage with consumers. With its vast user base and powerful influence on consumer trends, the company has immense advantages in the field. However, the European market comes with a unique set of challenges that TikTok might fail to overcome – should they decide to even try to.
What do you think? Will TikTok eCommerce succeed in the US and disrupt the global eCommerce market?