In a recent report on TikTok’s ambitions, we ignored commerce altogether to focus on its advertising ambitions and that was a mistake. While the ByteDance offshoot spars with Apple for the eighth largest advertiser in the united states, they’ve proven that they’re not going to be reliant on advertising alone to continue building its linear commerce kingdom. TikTok just might be able to succeed where other social media apps before it have struggled and even failed.
The video-sharing app, which has exploded in usership and cultural sway in the past two years, is planning its eCommerce strategy and signs point to it being a hefty investment, and TikTok Shop is poised to be a significant revenue engine for the platform which has already quickly built a massive advertising business.
A job posting for a business solutions and merchant development manager for a global fulfillment center is a signal that it’s planning on becoming an eCommerce platform in addition to a social media app. The job description reads: “With millions of loyal users globally, we believe TikTok is an ideal platform to deliver a brand new and better e-commerce experience to our users. We are looking for passionate and talented people to join our global fulfillment centre team, together we can build an e-commerce ecosystem that is innovative, secure and intuitive for our users.”
That’s just one of more than a dozen job postings relating to eCommerce and fulfillment posted by TikTok in the last two weeks, according to Axios, which reported on these product fulfillment centers on Tuesday. It says that TikTok is in the process of creating “an eCommerce supply chain system that could directly challenge Amazon”:
According to the job postings, TikTok is looking to build an “international e-commerce fulfillment system” that will include international warehousing, customs clearings and supply chain systems that support domestic e-commerce efforts in the U.S. and cross-border e-commerce efforts. The systems will eventually perform parcel consolidation, along with transporting goods from one stage to the next and managing free returns.
How is TikTok in position to take on Amazon? Well, it comes down to the user base and the mindset that people are in when they’re scrolling the app. While not every video is full of product recommendations, many are. Categories like skincare and beauty have seen products explode after going viral on TikTok – even the most mundane you might find on a CVS shelf, like long standing affordable skincare brand Cerave. Users post hauls from eCommerce brands and sometimes take viewers into Home Goods or Target to explain what they’re buying and why. Products that go viral often sell out. Fashion trends have been born on TikTok, and even videos that aren’t recommending products draw comments asking the creator where they got the sweater they’re wearing or the mixing bowl they’re using. Product inspiration is always in the background of any TikTok video, regardless of the topic.
That’s the key differentiator for TikTok compared to other platforms, which have had a hard time connecting the dots between user engagement and consumerism. Meta has walked back its Instagram shopping push, despite long being pegged as the next online mall, while Amazon’s QVC-like efforts have fallen flat. Snapchat, which has excelled in AR technologies and has partnered with some brands to make use of that, has been slow to build out an eCommerce arm.
For many, it doesn’t work. For TikTok, it might. It has a booming, loyal audience interested in transacting when they’re using the platform. By taking advantage of this, TikTok could connect users and creators directly to product listings and then ship out orders itself, reducing the reliance on middlemen. Right now, most creators will set up link-in-bios to their Amazon storefronts or Like to Know It lists, so anyone in search of a product has to jump through multiple linkouts in order to buy products. The speed with which TikTok is able to make products sell out in stores and online has shown that it’s not a complete hurdle for customers. But linking commerce directly into its platform opens a new revenue stream for TikTok that’s all the more critical now that Apple has clamped down on third-party advertising data collection. Like Meta, TikTok has been reported to be using in-app browsers to collect key data points that are against to skirt around Apple’s recent iOS privacy practices, which have made it more difficult to target ads.
Like other platforms, TikTok needs revenue from eCommerce to make up for that lost ad efficiency. But unlike others, it’s actually positioned to succeed. And this is what makes Meta’s retreat from eCommerce as shocking as TikTok developing teams around shipping and logistics. It’s the era of first-party data and retail media networks. Amazon has proven that native commerce is the best way to collect it.
By Web Smith | Edited by Hilary Milnes with art by Alex Remy and Christina Williams