TikTok Shop may be launched this week! TikTok Shop starts quietly in the US

TikTok Shop is not doing well in the UK, but is popular in Southeast Asia. The global market is polarized, but its GMV in the first half of the year exceeded US$1 billion, and the GMV target for the first half of the year was exceeded , which also gave it more confidence in its e-commerce business layout. Recently, there have been frequent reports that it will enter the US market. Does this also mean that it is starting to work towards the goal of growing more than 10 times within a year and reaching a GMV of US$23 billion ?

TikTok Shop may be launched in the US in November?

Recently, multiple sources revealed that TikTok Shop’s US site is in preparation for launch and will be launched around the second week of November, which is this week.

According to media reports, a group of American merchants invited by TikTok Shop are now participating in small-volume testing, and several companies have already cooperated with TikTok.   Shop's US business team reached a preliminary cooperation intention.

Yien.com learned from an insider that TikTok Shop in the US mainly recruits US sellers with inventory. Only a very small number of sellers in China (according to insiders, there are at most more than ten) can enter the full closed loop, and these domestic sellers must also have product inventory in overseas warehouses, which shows the importance of localizing product inventory. (Full closed loop can be understood as: consumers can pay directly on the platform without jumping to other platforms for transactions.)

Currently, TikTok Shop US does not impose any category restrictions on sellers who are invited or actively apply for entry. In other words, as long as the products have local inventory in the United States and meet the entry requirements, sellers can start selling.

It is worth noting that the insider said that some service providers currently claim to have vacancies for TikTok. The insider said that these are semi-closed-loop entries, and reminded sellers to be careful of being deceived by "selling dog meat under the guise of selling mutton".

In short, TikTok Shop in the United States will not fully launch the "cross-border investment plan" for the time being. At this stage, it attaches great importance to the fulfillment ability of goods and strives to retain more consumers by delivery speed.

In October, Yien.com reported that TikTok was recruiting a large number of employees related to logistics and distribution positions, and clearly stated in the recruitment that " people responsible for the business development of TikTok's e-commerce logistics fulfillment services in the United States " Therefore , it is speculated that it is trying to establish its own logistics and warehousing operations center in the United States to cooperate with the upcoming launch of TikTok.   Shop ’s e-commerce business in the United States.

Prior to this, foreign media reported that TikTok will establish a partnership with Talk Shop Live, a Los Angeles-based company with many years of experience in live e-commerce , to provide basic technology and support for its live streaming sales in the United States .

TikTok has not responded to the above news , only saying that it would not comment. However, it can be seen that TikTok Shop is more low-key and cautious in its layout in the US market than before.

TikTok is gaining popularity in the U.S. with nearly 140 million users

Why is TikTok so determined to take on the tough challenge of the United States? After all, since TikTok has set off a new wave of popularity around the world with its new social model of "short video social networking", the US authorities and industry peers have always regarded it as a "thorn in the eye" and have repeatedly called for a ban on the platform.

On the contrary , in the eyes of American consumers , TikTok is a hot social platform and the best proof of keeping up with fashion trends .

Data from BanklessTimes.com shows that TikTok has 136.5 million loyal users in the United States , 27% higher than the second highest country in its user ranking ( Indonesia with 99.07 million users ) , among which young users account for the majority.

Furthermore, not only does the United States lead in the number of TikTok users, but the five most followed TikTokers on the platform are also located in the United States.

BanklessTimes CEO Jonathan   Merry said that these data proves TikTok 's popularity in the United States and also means its successful entry into the US market . Merry also expects TikTok's user base to continue to grow.

Earlier, the "2022 Generation Z's Favorite Brands" report released by Morning Consult also showed that TikTok has become one of the top 3 most popular brands among Generation Z in the United States .

TikTok's influence in the United States is self-evident, and many brands are keen to market on the platform. In the second quarter of this year, a DTC brand said that its advertising budget on TikTok increased by 231% compared with last year.

At the same time, its competitors such as Snapchat and Twitter are facing the negative impact of weak advertising demand. Earlier, dragged down by the declining advertising business, Snapchat even lowered its third-quarter revenue forecast.

Smartly's latest survey shows that 55% of respondents said they would be willing to purchase holiday gifts directly through social media ads during the holidays , of which 24% said they would purchase holiday gifts through TikTok , an increase of 6% from 2021.

Giants lowered their fourth-quarter expectations, but TikTok Shop was still going to happen

TikTok's influence in the United States is growing, and its e-commerce business is not enough. But is it a wise move to choose the United States at a time when the consumer market is sluggish and the competition is fierce ?

The current decline in consumer purchasing desire has become the norm, and the US market is no exception. Looking at the third-quarter financial reports of industry giants, some of their North American businesses have intensified losses.

Amazon's third-quarter financial report showed that its North American division had an operating loss of US$412 million, compared with an operating profit of US$880 million in the same period last year, a year-on-year decrease of 147% .

eBay's third-quarter financial report showed that the GMV in the US market was US$8.699 billion, a 7% decrease from US$9.312 billion in the same period last year .

Wayfair was affected by soaring global interest rates , falling home sales and weak consumer furniture demand. Active customers on its platform fell 22.6% year-on-year to 22.6 million , net income fell 9% year-on-year , and order deliveries fell 20.9% , with the United States accounting for the majority of these data .

The downturn in the US market has not yet ended. In the fourth quarter, which is the peak season, industry giants are not optimistic about the development of the US market. This can be seen from the fact that Amazon and eBay have lowered their fourth-quarter revenue expectations.

In addition, after announcing the suspension of recruitment in the retail and advertising departments, Amazon's vice president of human resources Beth Galetti also announced recently that Amazon has begun to suspend or slow down recruitment in various departments in recent weeks, and will suspend recruitment in all departments of the entire company in the next few months .

The negative atmosphere in the US market is spreading, and competition between platforms is in full swing.

Temu, which entered the US market in September, has currently achieved a good result of an average daily GMV of US$1.5 million. SHEIN, which has been rooted in the US for ten years, plans to achieve a GMV target of US$30 billion this year. The online traffic growth of Alibaba International Station and AliExpress in the US market is also accelerating. The competition among overseas platforms is already fierce, not to mention the user awareness and trust of local platforms such as Amazon and Walmart.

Although the competition is fierce, it is understandable to seek new ways out at a time when performance is generally declining. With this layout in the United States, will TikTok Shop repeat the mistakes of the British market, or will it be as popular as it is in the Southeast Asian market, or will it advance steadily and low-key?

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