Interview with FastData founder Shi Wenlu: In the TikTok e-commerce era, find your own suitable position and do your own suitable business!

With the rise of TikTok and various short video platforms, the golden age of cross-border e-commerce has begun.

Based on the current development path of TikTok e-commerce and the various questions that sellers have about TikTok layout, Baijing Cross-border specially invited Shi Wenlu, founder and CEO of FastData, a global leading short video data platform, to discuss the current situation and future trends of TikTok e-commerce from multiple dimensions.

Based on the present and looking to the future, Mr. Shi contributed to us his insights and deep insights from the front line of TikTok e-commerce, hoping to do his part to promote the development of China's cross-border e-commerce!

White Whale Cross-border: Hello Mr. Shi. Can you introduce yourself, FastData’s business scope (what value can it bring to Chinese cross-border e-commerce sellers) and the achievements it has made?

Shi Wenlu: FastData is a global data platform driven by products and technology. Since its establishment in 2022, FastData has developed into the most influential and credible data analysis tool in the TikTok ecosystem, and has achieved fast, accurate and comprehensive data analysis on TT's live broadcast room, products, small shops, influencers, short videos, advertisements and other chains. The platform data covers major TikTok commercialization countries and regions such as the United States, the United Kingdom, Indonesia, Vietnam, the Philippines, Thailand, Malaysia, etc., and has become the preferred data tool for a large number of Chinese merchants going overseas to do TikTok. It has received investment from many well-known institutions and created many firsts in the industry.

Sellers can use a series of data with full dimensions, granularity and accuracy, such as full live broadcast room data, market data of the same category, full closed-loop data, keyword search, etc., to provide decision-making basis for their own hot product selection, pricing, market selection, expert selection and material production, which is also the core advantage of FastData.

(Screenshot from FastData’s official website)

White Whale Cross-border: What are the proportions and performances of the several types of sellers that TikTok is currently making money from, such as brand sellers and distribution sellers?

Shi Wenlu: Brand sellers and wholesale sellers are very common on the platform, and there are many successful cases of different models on TikTok. Overall, there are more and more mature brand sellers on the TikTok e-commerce platform.

FastData also has a large number of overseas e-commerce sellers as users, and is the top data platform in Southeast Asia. Local sellers in Southeast Asia are not very aware of TikTok yet, but this awareness is constantly increasing, and they are beginning to realize the huge opportunities TikTok holds.

Unlike Chinese sellers, overseas sellers are very clear about the path that Douyin has taken and know that this is a huge opportunity. Of course, many local sellers in Southeast Asia are from China and have set up local businesses in Southeast Asia. In the United States, there are both brand merchants and distributors entering this industry, rather than being dominated by local merchants.

Baijing Cross-border: Do you recommend different types of domestic enterprises to join TikTok? For example, foreign trade factories, domestic e-commerce platform sellers (Taobao, JD.com, Pinduoduo sellers), etc.

Shi Wenlu: Definitely. It is not only recommended to domestic merchants, but also actively embrace it. TikTok must be the next core of global e-commerce development with incremental growth, a new and huge platform with strong user policies and penetration capabilities. For cross-border e -commerce sellers, new platforms are an important channel for shaping consumer brand awareness. If you don't create a new platform, users will easily forget you.

The user growth of domestic short video platforms has basically reached the ceiling. The short video platforms with increasing users in China are Douyin and Xiaohongshu. Of course, Xiaohongshu is not entirely a short video platform. Globally, users are rapidly flocking to the emerging platform TikTok. The user usage time shows the user's activeness on this platform: the average usage time of domestic Douyin users is 125 minutes, while the average usage time of overseas TikTok users is much more than 125 minutes.

I have discussed this topic with the senior executives of domestic e-commerce platforms. There is a core judgment logic here: where the users are, the business should be there , just like when we open an offline store, where the users are, where the traffic is, the store location is also there. For domestic sellers, TikTok is undoubtedly a huge opportunity.

White Whale Cross-border: In your opinion, what are the advantages and disadvantages of Chinese sellers compared to overseas sellers in terms of product selection, content production, supply chain, etc.?

Shi Wenlu: We have come into contact with a lot of overseas local sellers and domestic cross-border sellers, and have had in-depth exchanges and discussions with them. First of all, the advantages of Chinese sellers compared with overseas sellers are mainly the following:

First, cognitive advantage. Chinese sellers have experienced the baptism of short videos and live broadcasts such as Douyin, Kuaishou, and Video Accounts. Chinese sellers have a very clear sense of the Internet and judgment of future business trends.

Chinese sellers know more clearly than overseas sellers that this is a huge opportunity, so they will spontaneously sprint on this track. Overseas e-commerce sellers have not yet clearly realized the commercial value of short videos and live broadcasts. Therefore, the difference in cognition is a huge advantage.

Second, the ability to tell stories. As we all know, the competition in domestic e-commerce is very fierce, and domestic sellers who go overseas have all fought hard battles in China. Therefore, Chinese sellers are far better than overseas sellers in the ability to tell stories and operate brands.

Third, Chinese sellers are also very clear about the gameplay of short videos and live streaming e-commerce. I talked about the judgment of prospects before, and here I will talk about the methodology, where Chinese sellers also have advantages.

Fourth, the domestic supply chain advantage and the diligence of the Chinese people. The supply chain advantage is a major confidence for Chinese cross-border sellers to go overseas, and China's supply chain is more complete and comprehensive. In addition, Chinese sellers and operators are very hardworking, and hard work is also an important factor in their successful development of overseas markets.

From these points, Chinese sellers have huge advantages. On the other hand, Chinese sellers also have some disadvantages in overseas markets.

For example, the localization capability needs to be strengthened. Chinese sellers do not understand the overseas local culture, local consumer preferences, and the market scope of local commodity price competition as well as overseas local sellers. In addition, the delivery warehouse should not be placed in China as much as possible. If you have the strength, it is recommended to deploy overseas warehouses, which can be highly responsive to consumer needs. Chinese sellers also need to have a localized operation team. In addition, Chinese sellers lack various relationships in the local society, such as government relations and market relations.

But these disadvantages can be compensated by the above advantages. With the intelligence and diligence of our Chinese sellers, these shortcomings are not irreparable.

White Whale Cross-border: I believe what you said is also the main reason why Chinese TK sellers have carved out a niche in Southeast Asia.

Shi Wenlu: TikTok has built new infrastructure and channels for Chinese brands and products to go global. Not only in Southeast Asia, but also in various global sites that will be launched in the future, Chinese sellers will achieve quite good results. In fact, the past success of Chinese sellers on Amazon, independent sites and various APP e-commerce platforms (such as TEMU, SHEIN, etc.) has proved the combat effectiveness of Chinese sellers.

The more important reason for being optimistic about TikTok and betting heavily on the short video platform track is that the content form of short videos essentially surpasses pictures and texts. As a richer information carrier, short videos will inevitably crush the e-commerce model of the traditional picture and text era in the new era. This trend is inevitable and will definitely happen. However, in the process, some twists and turns and adjustments are very normal.

White Whale Cross-border: What is the biggest pain point for domestic sellers to deploy TikTok? I noticed that many domestic brands going overseas do not have high popularity on their official accounts on TK, and there seem to be obvious shortcomings in content production and creativity.

Shi Wenlu: As a Chinese seller, content creation is indeed a link that needs to be paid attention to. However, the poor performance of the official accounts may only be a part of what you see. In fact, there are many Chinese sellers whose TikTok official accounts perform very well.

The official account is only part of the operation. What is more important is to know where your traffic is on TikTok . The source of traffic obtained by good operations may be the live broadcast room of Internet celebrities, or it may be more short videos of experts who recommend you, or it can be combined with traffic advertising to form a three-dimensional operation.

Moreover, the results you can get may not all be on TikTok. This is also a very common situation on TikTok in the United States: many influencers have released short videos related to products, and these videos do not have links to the yellow car, which results in the same products on Amazon being sold out until they are sold out and removed from the shelves. Just like the explosion of a product promotion video on Douyin in China, it will lead to a surge in sales on Taobao and JD.com. Therefore, sellers should not only focus on their own TikTok accounts, but also make full use of traffic sources such as expert short videos, influencer live broadcasts, and advertising traffic, and look at the contribution of TikTok from all sales channels.

Baijing Cross-border: That’s right, traffic will overflow into different platforms.

Shi Wenlu: Yes, the term spillover is very accurate. For sellers, it is necessary to comprehensively consider the value that TikTok can bring and to plan from a more comprehensive perspective.

White Whale Cross-border: You should be very optimistic about the United States’ fully closed-loop model, right?

Shi Wenlu: Yes.

White Whale Cross-border: The semi-closed loop model seems to be the mainstream in North America now. Based on my personal observation of overseas e-commerce sellers, it seems that most big brands prefer to direct traffic to their own independent websites and settle in private domains. Of course, this is my personal opinion. Looking at the past of big overseas brands, many brands have shown resistance to over-reliance on traffic platforms. They prefer to simply use the platform as a traffic channel, rather than being restricted by the traffic platform. So, what do you think of the future trend of the full closed loop model in North America?

Shi Wenlu: I don’t think so. The launch of the full closed-loop model in North America is undoubtedly a huge market opportunity. The reason why the United States has not yet started the full closed-loop model is that the infrastructure of full closed-loop stores in the US market has not yet been truly perfected.

The shopping experience of American users on TikTok is very unfriendly. Whether jumping to Amazon or the independent website, they need to jump outside the TikTok APP. Even if the traffic is not accurate enough and the jump path is long, it can still bring amazing sales to Amazon and the independent website. After the full closed-loop model is launched, the traffic label will be more accurate, and transactions can be completed within the APP. The corresponding products can be purchased directly on the small yellow cart hanging in the video, and the conversion rate will naturally increase.

As TikTok improves its US e-commerce infrastructure, the success of the full closed loop is only a matter of time. Just like we are sitting in a time machine to look at the development path of Douyin in China, in 2019 we might say that Douyin's full closed loop is difficult to run, because at that time all the e-commerce product links on Douyin were imported to Taobao and JD.com. In that year, Douyin cut off the link to Taobao and opened the Douyin store function. Douyin's e-commerce closed loop has soared since then. Last year, Douyin's e-commerce business completed a GMV of 1.6 trillion.

It took other platforms ten years to achieve 1 trillion GMV, but Douyin did it in two and a half years. Therefore, the fact that TikTok's full closed loop has not yet entered full popularization does not mean anything. In the future, data labels will be more accurate, shopping links will be more convenient, and the full closed loop will inevitably represent a huge market.

White Whale Cross-border: Indeed. I understand your explanation. In the early stage of Douyin, sellers connected to the external ecosystem can cultivate users' purchasing habits on Douyin. In the early stage, when there is a lack of supply-side sellers in the APP ecosystem, we first use the power outside the ecosystem to accumulate user behavior data and streamline the algorithm for matching people. It also allows sellers outside the ecosystem to taste the sweetness of Douyin traffic and lay a good foundation for later investment promotion. When the time is right, cut off external links.

Shi Wenlu: Yes, from the perspective of the platform, the layout is also a gradual process. The growth of the ecosystem is a systematic project, such as the quality control of merchants, user experience optimization, etc. There are many variables that need to be considered. It is far from a superficial link jump problem.

Baijing Cross-border: What do you think of the "full hosting model" launched by TikTok e-commerce? Which part of the merchants will benefit greatly?

Shi Wenlu: There is no doubt that the fully hosted model launched by TikTok will achieve great success.

Products under the fully-hosted model are extremely cost-effective. At the same time, there is huge traffic under the TikTok ecosystem, and the system has accumulated a large amount of user behavior label data behind the traffic, which can match accurate users for products. This will be a huge market.

There is one difference between TikTok and Douyin: Unlike the inconspicuous mall entrance at the top of Douyin in China, the TikTok Shop mall occupies a very eye-catching homepage entrance position in TikTok. Since the TikTok Shop mall was launched in many Southeast Asian markets, it can be seen that the transaction volume contributed is also very high.

The full hosting model is right under the mall. Considering the huge number of users and the cost-effective competitive advantage of the full hosting model, there is no doubt that the full hosting model means a huge market. Moreover, the full hosting model is very beneficial to the activity of the entire e-commerce ecosystem, the supply guarantee of products, the richness of merchants, etc. As for how much TikTok's full hosting model can achieve, and whether it can eventually surpass TEMU, this is another question.

Baijing Cross-border: As a TK seller, if I choose not to join this full-hosting model, will I, as a seller of other types, be impacted? Will there be any impact?

Shi Wenlu: There are currently three types of TikTok e-commerce: local e-commerce, cross-border e-commerce, and full hosting mode. Merchants can choose the one that suits them. From the perspective of transaction scenarios and commodity price ranges, these three types are suitable for different types of merchants. It can even be said that the functions of different TikTok e-commerce types are also different.

The full trust model is suitable for standard products, products with extreme cost-effectiveness, factory-type sellers with strong responsiveness, and merchants integrating industry and trade. For example, the full trust model can be used to clear tail goods. The official stores of brand merchants are more suitable for local e-commerce, but they can also be supplemented by the full trust model. In particular, the inventory problem that is a headache for clothing sellers is that the backlog of poorly selling styles can be cut off with labels and handled through the full trust model, while maintaining separation from brand sales channels.

White Whale Cross-border: Currently, the short video live streaming track remains hot. If you choose to conduct TikTok live streaming in China , is it feasible?

Shi Wenlu: It is not feasible. The overall trend of short video live streaming is positive, but if you want to do TikTok live streaming in China, it is unlikely to work.

First, TikTok will assume that your IP is in China. Even if you can solve this problem through dedicated lines or some technical means, TikTok cannot push accurate traffic to you. Secondly, localization is required in any market, and the network sense required for TikTok operation must be deeply rooted in the local area. Each country also has its own unique discourse system, which can only be understood by going deep into the local area. Furthermore, it may be difficult for Chinese faces to appear in overseas live broadcast rooms to establish user trust and emotional connection between users and brands. Finally, live broadcasts must respond to the market very quickly, which is almost impossible in China.

White Whale Cross-border: So, if you want to do live streaming, you still have to deploy TikTok live streaming rooms overseas?

Shi Wenlu: If you don’t have this determination, don’t do TikTok live streaming. The core of going overseas is that the founder must have the determination to go overseas and make going overseas a strategic positioning for the company. Without a strategic positioning and firm determination, and without the attention of the boss, it is impossible to achieve anything.

White Whale Cross-border: What do you think of Facebook, YouTube, Amazon and other platforms also laying out short video and live streaming tracks? What impact will this have on the future of TikTok?

Shi Wenlu: This is a good thing for the development of the entire short video live streaming industry around the world. It is beneficial to the cultivation of users and businesses, as well as the prosperity of the entire market ecosystem, and will also promote the development of TikTok.

Of course, the entry of competitors of the same size as Facebook and YouTube into this field will also bring about a new distribution pattern.

Baijing Cross-border: We Chinese sellers can do well in TikTok e-commerce and also replicate our successful experience on other short video platforms.

Shi Wenlu: That’s for sure. Our Chinese sellers have achieved very good results on these social media platforms, SHEIN is an example.

White Whale Cross-border: Thank you very much for Mr. Shi's insightful comments. We have learned a lot of in-depth insights from you from the front line during this interview. Is there anything else you can share?

Shi Wenlu: Let me expand a little bit on the topic of which sellers are suitable for the full-hosting model, local e-commerce and cross-border e-commerce models.

Local e-commerce is very suitable for local brands or sellers with strong overseas business. Of course, many overseas brands may be operated by Chinese sellers. Local e-commerce is also very suitable for sellers with resources and strong distribution capabilities.

The full trusteeship model is suitable for standard products and products with the best cost-effectiveness. It is very suitable for domestic factories with strong responsiveness, because factories have cost-effectiveness advantages and are suitable for the full trusteeship model that removes middlemen. Of course, not all factories are responsive, and foreign trade sellers who integrate industry and trade also have great advantages.

As for the cross-border store model, some sellers of high-priced products and brands will start from the cross-border store model and then switch to local e-commerce.

The full hosting model, local e-commerce and cross-border e-commerce models are suitable for different price ranges, different products and different types of sellers. The three e-commerce models are not conflicting.

As for whether the postponement of TikTok's e-commerce business in the United States will affect sellers' confidence, there is no need to worry about it.

We can see that domestic TikTok feature releases are often delayed, but from a longer timeline, this will not affect the overall trend. From the long-term trend of short videos and hobby e-commerce, some minor setbacks in the present and short term are not important and will not affect the overall trend.

Even though the US has not launched a full closed loop yet, a popular short video will boost Amazon's sales, and there are also massive sales that have already been generated under the semi-closed loop. This shows the strong potential of TikTok. The hashtag #Tiktokmademebuyit alone has accumulated 57 billion views.

Therefore, for the future of TikTok e-commerce, in addition to common sense judgment, these data and facts can show that TikTok e-commerce has its advantages. However, many Chinese sellers have doubts about the prospects of TikTok e-commerce, and they always wait until things become clear before they believe it and make a summary afterwards.

More than a year ago, when many people were questioning the Southeast Asian TikTok e-commerce market, I firmly believed that there was no reason why TikTok e-commerce in Southeast Asia would not succeed. We Chinese entrepreneurs have seen the development history of Douyin, Video Account, and Kuaishou. We have a better understanding of hobby e-commerce than overseas sellers, just like riding a time machine back to the past. This time difference advantage in cognition is very significant.

So we see the same trend in TikTok e-commerce in the United States. The American TV shopping business model is very mature, and coupled with the huge American e-commerce market, we Chinese sellers don’t need to doubt the future of TikTok e-commerce in the United States.

White Whale Cross-border: I understand, but we still have to look at the long term.

Shi Wenlu: Yes. In addition, in this track, every entrepreneur should find his or her own suitable position and do his or her own suitable business. This is the most important thing.

Some people are suitable for distributing goods, some are suitable for factories, and some are suitable for brands. After finding their own position, they should wait patiently. The market is still in a very early stage, but it is on the eve of an explosion. Just like Douyin in 2019, there will be huge explosive potential and growth opportunities in the next few years.

The trend is there, and what we need to do is embrace the change. In the history of China's e-commerce development, those brands that rejected Taobao and Douyin eventually had to accept the change and embrace the onlineization of business and interest e-commerce. No one can stop the trend, but can only embrace and accept the big trend. Is this also the case with TikTok e-commerce?

Baijing Cross-border: Thank you very much to Mr. Shi from FastData for providing us with so many in-depth explanations and insights.

Shi Wenlu: You’re welcome. I hope this interview can become an in-depth article that witnesses the history of global e-commerce development.