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Overseas live broadcasts are coming soon? TikTok is testing the seller's market


Overseas live broadcasts are coming soon? TikTok is testing the seller's market

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TikTok Shop Grayscale is online

TikTok recently released a new business unit called TikTok Store (TikTok Shop), and published on the currently public TikTok Shop Seller University page including store intellectual property policies, store prohibition/restriction product guidelines, and product listing guidelines , Order shipping guidelines, and multiple store terms such as order cancellation, return and refund guidelines.

The source confirmed to Guanhailunshang that TikTok is taking the lead in developing TikTok store grayscale tests in Indonesia, which is also an extension of the ongoing commercial-related tests.

The test was conducted after the Financial Times reported that TikTok is developing a series of new e-commerce features, including the brand's product catalog options, real-time streaming shopping programs, and affiliate marketing systems, which can enable individual TikTokers to earn sales commission. According to Seller University’s website, all of these features are available through TikTok Shop, a beta version of the third-party seller program. This shows that TikTok is building a more sophisticated third-party market than its closest competitor, Instagram Shops.

"I think TikTok wants everyone to sell in the app, not just small and medium enterprises." Said Sasha Shilko, who studies Nexttbrand brand trends.

(Inside TikTok store dashboard)

This is not TikTok's first foray into e-commerce. The company began to provide integration with Shopify in October, and in December with Walmart launched for the first time a real-time streaming media for shopping, in which customers can directly purchase Walmart clothing. Although TikTok hardly revealed any detailed information about its future for shopping, it is evident from its domestic product Douyin. The Douyin store is open to individuals, small businesses and major franchises. To sell on Douyin, the supplier needs to pay a prepayment and then hand over a 5% sales discount.

For Douyin, shopping has become an important source of income. According to a LatePost report, Douyin’s e-commerce sales have tripled in 2020, reaching around RMB 500 billion, or approximately US$77.2 billion, although many of them are recommended to external websites such as Taobao.

According to reports, total sales in Douyin apps totaled 100 billion yuan ($15.4 billion).

TikTok Affiliate, a more intuitive rate of return

By participating in the beta version test, brands and interested users can apply to become TikTok sellers.

If approved, they will have permission to log in to TikTok's seller center, where they can set up their own TikTok store. In the seller center, they upload products and prices, receive and process orders and transactions, track delivery, refund and establish contact with customers. At least to start, TikTok stores charge a 2% commission on each order. In the Beta test, certain products cannot be sold on TikTok, including "political products".

The test also hinted at the forward-looking of the affiliate program led by TikTok. When brands upload products to TikTok’s Seller Central, they can create ad campaigns with individual influencers through a program called TikTok Affiliate. In this way, influential people can sell products to their followers directly in the app, while earning commissions from the brand. This approach fundamentally eliminates the middle-level commercial organization.

If the TikTok market completes the testing phase, it can benefit many big brands and TikToker who want to sell their own products. In terms of brands, the sales portal Shilko said that the combination of the seller portal and TikTok's own rejuvenated advertising platform will provide the company with more data about which users actually bought their products. At present, TikTok is a very valuable sales tool. Its viral videos have pushed the popularity of chocolate bombs and cranberry juice products to new heights. However, brands rarely know exactly where this increase in popularity comes from.

"We all know that TikTok can be viral, but we can't judge the return on investment." Shilko said.

TikTok stores will also increase their personal influence. They can use this new feature to not only sell their own products, but also easily earn affiliate commissions for products that have already been promoted. The influencers of product recommendations have generated huge traffic for the products on Amazon, and the in-app agency commission system will make these conversions smoother. Haberman said: "This just gives creators a more income choice, and to some extent verifies the creator's philosophy as a business and business owner.".

TikTok doesn't seem to be the only social media company pursuing an in-app affiliate program: Instagram recently introduced code that seems to allow this. This is based on Facebook's efforts to integrate e-commerce more tightly on all of its platforms. Instagram has expanded its store functions; Facebook is investing in Marketplace; both Facebook and Instagram are launching live streaming functions. Facebook also recently added a shopable store to WhatsApp. In all cases, the goal is to facilitate transactions on each platform, and this feature makes Facebook more attractive to advertisers and makes influencers happy.

The starting commission rate for TikTok stores is only 2%, which is very low. If the test is widely used, it may become TikTok's main revenue engine. For TikTok, the value of having a cross-border e-commerce market may be that it can make ads more effective in converting viewers into customers.

Shilko said that if TikTok can provide a seamless buying experience when scrolling, it will become a more valuable advertisement for the brand. "

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