TikTok shopping and entertainment center! Zhang Yiming's ambition and vision

“TikTok Shop is far more than an isolated e-commerce platform. TikTok officials have greater ambitions and vision. Perhaps a more comprehensive shopping and entertainment center (Shopping Mall) is what the future of e-commerce will look like.”

What is TikTok's official plan? How can sellers resonate with the platform's strategy?

In the past few months, TikTok has steadily promoted the global layout of the TikTok Shop mall model. After testing the waters in the Indonesian market, it has continuously expanded its coverage and further officially launched in more countries.

Compared with the domestic Douyin mall entrance located at the top of the APP, the mall entrance of the overseas Douyin TikTok is placed in the most eye-catching function bar below, which shows the official's attention to it.

The internal layout of the TikTok Shop mall shows the platform’s diversified planning for traffic distribution.

In the TikTok Shop mall, a prominent search box is placed at the top. For consumers, they can quickly search and discover products directly through the search box, and find the products they want more conveniently.

The mall homepage also includes a new user area, a flash sale area, and a product category recommendation area.

In the product recommendation area, products will be displayed according to categories such as clothing, beauty, and electronic products. As user shopping behavior data accumulates and becomes increasingly rich, the personalized recommendations in this section will inevitably become more accurate. The platform can recommend products that are most likely to be sold and match them with corresponding consumers based on product crowd tags, product tags, and relationship tags. This section will undoubtedly become one of the most important sources of traffic.

Many industry insiders believe that TikTok Mall is a major turning point for TikTok to move towards a dual-driven model of content e-commerce + shelf e-commerce.

Content e-commerce is essentially "interest e-commerce", which is mainly based on content conversion consumption. Users have no shopping intention when watching videos, but are stimulated to shop after watching short videos and live broadcasts, which triggers the purchase behavior. The essence of shelf e-commerce is "search e-commerce", which refers to the shopping behavior of users who have clear needs and actively search on the platform.

What is the logic behind TikTok Shop’s dual-driven model of content e-commerce + shelf e-commerce?

"TikTok Shop has been exploring ways to enhance the shopping experience. With the introduction of the new mall feature, users can experience a simple, direct and fun shopping experience on the platform. We also hope that this feature will help platform merchants acquire more new users," explained the person in charge of the TikTok Shop mall.

Is it just a consideration of the shopping experience?

It’s much more than that!

TikTok Shop is an extremely important part of Douyin's overseas layout, and the ByteDance team's strategic considerations are extremely far-reaching and clear.

Let’s look at the logic and purpose behind TikTok’s strategic layout of the mall model.

Directing spillover traffic to the TikTok platform for consumption  

Traffic spillover is a concept that many cross-border e-commerce sellers are not familiar with. For example, we often hear that a certain video on TikTok goes viral, which leads to a huge explosion of sales on Amazon stores or other platforms, or even on independent websites.

There are multiple scenarios here.

One situation is that there is a shopping cart on the video, but the consumer did not buy it at the first time. When he wants to buy it later, he will search and place an order on other e-commerce platforms based on the keywords in his memory. Or this consumer is more cautious and savvy, hoping to search for more options and make a decision after comparison.

Another situation is that the popular TikTok video does not have a product link. The video creator may be a consumer who has no intention of bringing goods and casually shoots UGC content; or the influencer may not expect that the video will bring sales to the inconspicuous items in the video.

Sometimes we see that in videos where influencers promote clothing brands, viewers comment and ask for shopping links for the cups or other items in the influencers’ hands.

In these cases, without exception, users will most likely choose a shelf e-commerce platform that they believe is more complete and perfect to conduct their search.

You have done something for others in vain!

The eye-catching TikTok Shop mall entrance can take over this part of the search traffic and reduce the possibility of traffic spillover to a certain extent.

· Cultivate users’ long-term shopping habits and keep them in the mall for long-term retention

Hobby e-commerce stimulates impulse buying in most cases. But for consumers, impulse buying is not a high-frequency behavior, and users will not be in an impulsive state for a long time.

Although TikTok has a huge e-commerce user base, when users have clear shopping needs, their first choice is often not TikTok, but other e-commerce platforms. The platform hopes to retain these consumers who have made shopping behaviors on the TikTok platform for a long time and gradually cultivate users' shopping habits on TikTok. Rational and rigid consumption is the norm and the core of long-term and stable growth of GMV!

Behind rational shopping behavior is a large amount of active search behavior. Only by cultivating the "search shopping" mentality and habits can e-commerce consumers be settled in the TikTok ecosystem in a long-term and stable manner.

In addition, impulse shopping is more common in low-priced products. However, the shopping process for high-priced products is relatively long. After watching the video and being attracted, consumers also need to search and compare more options before placing an order. Integrating the two-way consumption process of "goods looking for people" and "people looking for goods" into a more complete shopping scenario and locking the entire behavior process within the TikTok platform can effectively improve user retention and the GMV of TikTok's e-commerce business.

To give a simple example, unlike the fast-fashion, low-priced women's clothing category with a short decision-making chain, the furniture category is relatively high-priced and low-frequency, and the user purchase decision cycle is long. Moreover, the after-sales process is complicated. Once the purchase does not meet expectations, it involves many factors such as size, weight and after-sales, resulting in a cumbersome return and exchange process. For users, there is a higher risk of money, time and energy in purchasing this category. Therefore, it is difficult for consumers to be triggered to buy by a single video that is touched once. Even after watching the video and arousing interest, the audience needs to search and collect more relevant information to make a decision.

If consumers jump out of TikTok and search on Google or e-commerce platforms, it will also lead to traffic spillover.

If TikTok wants to take over the market for categories with long purchase links, such as furniture, it must cultivate users' rational and planned purchasing habits in the TikTok mall, so that consumers' entire behavioral chain is locked within the TikTok platform.

· Build a perfectly competitive market and form healthy competition

The ultimate competition among e-commerce platforms will inevitably be about providing better-quality products at lower prices and a more diverse range of merchandise.

Compared with content e-commerce that triggers purchase behavior after watching content, search e-commerce reduces the cost of consumers' search and comparison. It is relatively inconvenient for us to compare other similar products after watching a video. Search shelf e-commerce is closer to a fully competitive market. When consumers can more conveniently compare multiple similar products on the platform, it will trigger competition among sellers. In a healthy competition environment, the winners must be sellers who make products with heart and better cost performance.

High cost-effective products are not competitive advantages. The supporting system behind the cost-effectiveness is the core competitive advantages.

The more cost-effective high-quality products and richer merchandise variety attract more consumers, and the growing buyer base further attracts more high-quality sellers to join.

Enhanced loop flywheel formation!

This was also Amazon's previous growth path.

Alleviate and stabilize the pulse sales of content e-commerce

Many cross-border e-commerce sellers have a love-hate relationship with the pulse traffic brought by TikTok's traffic pool recommendation algorithm. The sudden increase or decrease in traffic in the short term leads to extremely unstable sales. For sellers who lack a stable base on other platforms as a supplement, this pulse traffic and sales changes will only bring a series of uncertainties in back-end supply such as stocking.

It is too late to prepare when sales explode, and if you prepare too much, future sales will be uncontrollable, and you may face the huge risk of a lot of dead stock.

The shopping demand awakened on TikTok, if TikTok sellers are unable to fulfill orders, consumers can only go to other e-commerce platforms to search and purchase, which will cause traffic spillover.

Shelf e-commerce has a relatively stable search traffic scale and predictable sales trends, which can stabilize pulse sales to a certain extent. The dual-driven model of content e-commerce + shelf e-commerce is undoubtedly a major benefit to sellers and the optimal solution for the TikTok e-commerce platform.

The future of TikTok: Shopping Mall

When Pinduoduo went public, Huang Zheng stated in a shareholder letter that Pinduoduo's vision was to create a new business ecosystem that combines "Costco" and "Disney," integrating high-cost-effective product e-commerce and entertainment. In the platform that Huang Zheng envisioned, consumers can not only enjoy the pleasure of shopping for high-cost-effective products, but also enjoy the joy of playing games.

Interestingly, the development trend of TikTok's e-commerce seems to coincide with Huang Zheng's plan. All of TikTok's actions are aimed at creating a super app that integrates short content, social networking, and e-commerce.

So, in such a super app, how do different businesses collaborate and promote each other?

Let's take the shopping links that are common among women as an example. In certain categories of shopping scenarios, female consumers show very broad shopping intentions. Female consumers naturally regard shopping as a form of leisure, from which they can get great pleasure and even become addicted. In other words, these female consumers are not sure what specific products they want to buy, but they have decided what to buy, and they go shopping with the subjective intention of shopping.

Compared with male consumers who search with a clear intention to buy products, female "shopping" behavior is very emotional and more susceptible to "grass planting". TikTok's content business line provides a built-in "shopping" scene, just like walking in a shopping mall, looking at a wide range of goods, surrounded by glamorous fashion gurus, immersed in warm and cozy music, and a strong desire to shop constantly emerges in your heart.

Although I didn't know what I wanted to buy at first, I came with such a broad shopping intention, and I was very happy to spend money and place orders during the shopping process.

Isn’t this a common shopping link for many women to buy clothes?

“I believe retail will split into two paths: one toward convenience and the other toward entertainment venues.”

——Michael J Wolf "The Entertainment Economy"

The social relationships on the TikTok platform further intensify this experience, allowing people to share and shop together online, and share the joy of shopping with a group of friends who have the same hobbies, tastes and aesthetics.

The future of TikTok is more like a shopping and entertainment center that integrates shopping, social interaction, and entertainment. Shopping on TikTok integrates social interaction, entertainment, and leisure, bringing spiritual pleasure to users. This is a more complete shopping experience!

For male consumers whose spending power is not as strong as that of dogs, they have clear intentions for specific products before entering the purchase scene. The shopping chain is short, and they pursue quick and convenient search to find suitable products. E-commerce content can also improve the shopping experience for this type of consumer group. Richer and more intuitive product evaluation videos can be more effectively used as a basis for purchasing decisions. Is this more convincing than graphic reviews? For sellers, does it mean a significant increase in purchase conversion rate?

The optimization of shopping experience brought about by e-commerce contentization is not only before shopping, but also during and after shopping.

For a furniture assembly novice like me who is often at a loss when faced with scattered parts, if I can find a detailed and intuitive assembly guide video on the product link, it can to a certain extent reduce the probability of me leaving a bad review out of frustration!

It is conceivable that content e-commerce and shelf e-commerce are not separated, but are interrelated and mutually supportive. In the TikTok ecosystem, the content business line and the e-commerce value line are seamlessly connected and promote each other. Just like the shopping and entertainment center ecosystem, through the mutual empowerment of multiple formats, it brings consumers a more diverse, rich and complete consumption experience. This ecosystem is bound to surge with strong commercial vitality.

So, how can we, as sellers, resonate with the platform strategy?

Traditional e-commerce platform operations are very clear. The traffic distribution rules in most e-commerce platforms are similar. The ranking weight is determined by indicators such as click-through rate, conversion rate, and positive review rate. The work focus of platform e-commerce operations is also mostly on keyword optimization, listing optimization, and positive review guidance.

In the past, TikTok operations did not need to focus too much on product page listing optimization, because the main source of traffic came from video recommendations. Whether sales could be explosive depended on how many videos were sold and how many videos were played. The focus of TikTok operations was to build connections with more high-quality influencers or to mass-produce more high-quality videos by raising accounts.

The future development trend of TikTok Mall means that TikTok operations need to pick up the platform operation strategies we are familiar with. Seriously do search engine optimization, improve rankings and occupy favorable positions; carefully polish the product page (pictures, titles, keywords, product descriptions, matching videos and Q&A, etc.).

Other TikTok e-commerce practitioners also gave some extended suggestions suitable for TikTok search e-commerce gameplay.

· Create new categories, pre-buried keywords to attract search traffic, and promote products through influencers and shopping malls

For example, the product of explosive salt is used for washing clothes and removing yellowing. The combination of the two functions defines a new category. Before using a large number of influencers to promote and shape users' perception of this category, it is necessary to optimize the product search of your own mall and pre-embed new category keywords. In this way, when this category is promoted, we can harvest the new category demand we have created to the greatest extent.

· Multiple links and keywords dominate the mall screen

Dominating the screen with multiple links is also a strategy that many e-commerce operators on many platforms are very good at. If after a user searches, the top-ranked links are all mine, and all the links that appear on the entire screen are occupied by me, then I can eat up most of the search traffic in this category.

Unlike traditional e-commerce platforms, TikTok has more diverse ways to quickly increase its volume and weight. It can increase the weight of links and occupy the front row of keywords through advertising, live streaming, and expert distribution.

For Amazon sellers and sellers on other cross-border e-commerce platforms, the search-based e-commerce model of TikTok Mall makes it easier to find the "familiar taste"; for TikTok e-commerce operations, shouldn't we also pick up the platform e-commerce operation methodology that is most familiar and convenient for us Chinese sellers!