70,000 pieces sold before the holiday, a large number of cross-border sellers rushed into the new platform

Is TikTok Shop still popular?

In the new year, many cross-border sellers are eager to try TikTok Shop. They see their peers selling 70,000 pieces before the holiday; others earn more than $300,000 in a live broadcast... Many sellers are eager to join. But they don't seem to see the cruel B-side: many sellers' stores are closed just when they are starting to improve; the platform commission is being greatly increased... Is TikTok Shop, which everyone is rushing to join in 2024, really attractive?

Seller: I feel like everyone will be doing TikTok Shop in 2024

After TikTok Shop was officially launched , its development seemed to be fast-forwarded. Sensor Tower data shows that the growth of TikTok Shop sellers has been "strong" since the fourth quarter of 2022. As of the fourth quarter of 2023, it increased by 230% year-on-year, with monthly active sellers reaching 6 million . According to Bloomberg, TikTok expects to expand its e-commerce business in the United States tenfold to US$17.5 billion in 2024.

Seeing TikTok Shop's rapid development, cross-border sellers are eager to get a piece of the pie, and many of them have set their sights on the US market. Seller Sam said that some of his Amazon friends have already started TikTok Shops, and some are preparing to do so. The overall feeling is that everyone will start a TikTok Shop in 2024.

The foreign trade captain of an industry insider asked: "Are there any friends who run TikTok Shop? If there are any good ones, please let me know." Many colleagues with similar needs immediately emerged, and many people expressed their desire to learn and ask for guidance. Some people also said that they have already registered a store. In the relevant seller group, everyone was asking questions about TikTok Shop account registration, product selection, celebrity promotion, etc.

At the same time, a group of people who have already tried it also reported their own situations. Some Amazon sellers entered the TikTok shop with the attitude of clearing out their stock, and found that low-cost product testing was very attractive. For example, product testing on Amazon requires hundreds of samples, but TikTok does not require this. Short videos or live broadcasts can make the judgment.

According to the data that has been released, TikTok Shop is more suitable for some small and medium-sized enterprises.

Among those who tried the test, one seller earned more than US$300,000 (about RMB 2.15 million) through a live broadcast , which is a huge number for small and medium-sized sellers; there was also a small skin care product business that published more than 20 new related posts every week and placed its largest inventory order ever before the holiday, selling 70,000 pieces.

An Amazon seller who has opened a TikTok Shop said frankly: The effect is quite good. It has just been a week since the start of sales. Currently, one of the products is selling well, with more than 100 orders a day. The advertising production can reach more than 4, and it can also greatly drive the increase of Amazon's traffic. He believes that if the products on Amazon can fit the attributes of social media, or the products are unique, it is still quite good to open a TikTok Shop. Originally, it could only divert traffic from outside the site to Amazon, but now it can be traded directly on TK, and Amazon will take over the overflow traffic.

Everyone is rushing to join the game, and behind the seeming prosperity, TikTok Shop sellers have many hidden worries.

There is a high probability that local accounts will be closed

A seller who tried TikTok Shop said that the influencer received 20 to 30 orders on the first day, nearly 50 orders on the second day, and the store was closed on the third day.

Soon after, many sellers reported their experiences of having their stores closed. Everyone generally reported that TikTok Shop local stores grew very quickly, but the stores were also closed very quickly.

Last month, a large number of sellers reported that their TikTok Shop stores were suddenly blocked. The scope of this blockage was very wide, which made sellers uneasy for a while. At present, it is difficult to download cross-border accounts on TikTok Shop, and the probability of local accounts being blocked is too high. The closure of the store is a situation that almost every TikTok seller in the US will encounter.

This also shows that TikTok is currently moving towards compliance and improving service quality, encouraging local shipments, requiring product quality, and trying to eliminate low prices, low-quality products, as well as fraudulent subsidies, false orders and other market-damaging behaviors.

In addition to the store closures, TikTok Shop's commissions are also being significantly increased. According to reports, TikTok informed platform sellers in early January that it would increase commissions for sales on its app, and the sales commissions for most items will also increase in the coming months. The specific time of the change will start from April 1, and the fee will jump from the initial 2% to 6%, and then reach 8% on July 1. However, not all products will be charged an 8% fee, and higher-priced categories such as electronics will have lower fees.

At the same time, TikTok Shop has also reduced the subsidies it has provided to merchants in the past. They will still provide subsidies, but only for the best-selling products.

This is inevitable. Any platform will have various preferential subsidy policies during its initial stage, spending money to increase sales and allowing consumers and merchants to get discounts with real money. However, relevant policies will gradually tighten in the later stage.

In response to this, a seller bluntly stated that all platforms are the same. They first gather popularity and then reap the profits. It is still difficult for merchants. They may make a profit in the early stage, but once the costs are raised and the commissions increase, everything is gone.

Although there are some unfavorable factors, the current development of TikTok Shop is still favored by many cross-border sellers.

Many sellers believe that TikTok Shop still has opportunities in 2024

According to the latest news, TikTok is currently testing a new feature that can convert all user posts into potential shopping opportunities, using technology to automatically identify objects in the video and then prompt viewers to explore "similar products on TikTok Shop" by navigating to the product page. This move is part of TikTok's ambitious plan to build an e-commerce business in the United States.

TikTok is also opening live studios in several cities in the United States to help creators broadcast live . The company will use these studios to allow creators to sell goods during live broadcasts and direct viewers to the app's storefront.

According to Insider Intelligence, social commerce will account for nearly 6% of total U.S. retail sales by 2026, and approximately 40% of TikTok users plan to make at least one purchase on TikTok in 2024 .

Hu Yu, founder of TikTok 's US service provider Wotu, revealed that TikTok's US GMV has now exceeded 14 million US dollars per day . Using Temu as an analogy, he predicts that TikTok's e-commerce daily GMV in the US will reach 100-200 million US dollars in 2024, and the US region alone may contribute around 30 billion US dollars.

Based on this, some cross-border sellers are still interested in TikTok Shop, especially some Amazon sellers.

"TikTok first gave subsidies and then cracked down on virtual warehouses, and many sellers who entered the market suffered heavy losses," said a colleague. However, he believes that TikTok Shop still has a future. Currently, it is preparing stocks, and live broadcast + influencers + video streaming are still good. Live broadcast/interest e-commerce still has its unique advantages over shelf e-commerce, and can break through Amazon's barriers to a certain extent. If TikTok and Amazon work together, they can really achieve the effect of 1+1>2.

Another industry insider holds the same view. In his opinion, TikTok Shop can do a lot, such as testing products, using low-cost and cheap traffic to grasp the market demand potential, and even conducting AB testing; then iterating and upgrading and setting up barriers such as patents and copyrights before accurately placing them on Amazon to make branded products.

Some people who entered TikTok Shop just tried it out at first , and only used it as a means of clearing inventory through live streaming. If they did well, they would be on the right track ; some people used TikTok to divert traffic to private domains. In short, many cross-border sellers believe that TikTok Shop still has opportunities in 2024 , and it depends on how everyone grasps it.

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