“Black Friday” sales surge, sellers “make money without doing anything”, will 2024 be the year of TikTok’s explosion in the US?

" Making money without doing anything. " This is how seller Danny described the market situation of TikTok Shop in the United States in the second half of this year.

Before Black Friday , Danny held a meeting with his colleagues to encourage them . His original words were: " There are US dollars under all of our feet now. It depends on whether you are willing to bend down and pick them up. "

Many sellers have said that the market conditions of TikTok Shop in the United States are very good in the second half of this year.

Two years ago, TikTok tried e-commerce in the UK, but it ended in failure. After opening the US site, it quickly became popular like a dragon in water. According to FastMoss data, when TikTok's US store officially started operating in August, its monthly sales were more than 5 million US dollars, which reached more than 10 million US dollars in October and more than 33 million US dollars in November.

During this year's " Black Friday " promotion, the GMV of TikTok Shop's US site on November 24 exceeded US$33 million in a single day.

Since TikTok Shop began internal testing in the United States in November 2022, TikTok e-commerce has been active in the United States. In September this year, TikTok Shop closed its semi-closed-loop e-commerce and launched the TikTok Shop mall, which means that TikTok e-commerce has officially landed in the United States. At the same time, TikTok launched a full hosting model in the United States and opened registration for local stores in the United States and cross-border stores in October.

In less than a few months, TikTok e-commerce has opened up a new situation in the United States. Perhaps encouraged by the good results, TikTok e-commerce has set a GMV target of 50 billion US dollars in 2024, double the target of 20 billion US dollars this year. This means that TikTok e-commerce will continue to increase investment, and the United States, with its huge consumption potential and high acceptance of social e-commerce, is undoubtedly a major focus market for TikTok e-commerce in the future.

After TikTok launched its US site, many sellers have actively participated in this blue ocean market. After three months, how is TikTok Shop doing in the US? Can short videos and live streaming bring goods to consumers in the US? How much room for growth is there in the future?

The grand occasion of explosive sales: " Picking up money everywhere "

Danny used to be a seller on TikTok Shop UK. In his comparison, the two sites, UK and US, are worlds apart.

Danny started working in the UK in 2021, mainly doing live streaming sales, which he did until October this year. Danny 's workplace is close to the Nancun Garment Factory in Guangzhou. At the beginning, he sold clothes live on TikTok in the UK, with an average customer unit price of 8 pounds, and only dozens of orders were placed every day. It was not until two years later, in June 2022, that Danny switched to Muslim clothing with an average customer unit price of 30-40 pounds, and sales began to grow.

Compared with the fewer hit products in the UK, which made it difficult to do business, Danny's business took off after he started to do business in the US. Danny 's US business model was a group of stores, which happened to coincide with the " Black Friday " promotion season. In the last two months of the year, Danny 's sales in the US reached 10 million US dollars.

Moreover, Danny 's sales in the US mainly rely on pure natural traffic and a small amount of influencer marketing, and even the proportion of advertising is very small. " Because the natural traffic is enough . " Danny said that during the peak season of these two months, TikTok's US region is in a state of less goods and more money, so the store can make orders by relying on natural traffic.

Another seller, Xiao Chen, also does pure organic flow. The difference is that Xiao Chen is an independent website seller, and TikTok is his new channel for expansion. Xiao Chen sells outdoor products on an independent website, with annual sales of about 20 million US dollars and a profit margin of 50%-60%. Before the launch of TikTok Shop, Xiao Chen did content marketing on TikTok and Instagram to build brand barriers.

In September, Xiao Chen opened a TikTok Shop. He said it was very easy to get orders on TikTok. “ At that time, we just followed a few products and they were very popular. ” Up to now, Xiao Chen’s store maintains an order volume of about 200 orders per day. As a high-profit product for a niche group, this sales volume is already considerable for Xiao Chen.

Xiao Chen's store does not conduct traffic investment or seek marketing from influencers. It mainly relies on the natural traffic brought by the account's short videos, and reuses the content marketing advantages accumulated during the independent website period on TikTok. " First, we have good quality control, and second, we mainly use videos to show products. " Xiao Chen said.

Different types of sellers have opened up their own situations on TikTok. TikTok seller Liu Yingfeng verified this view with the data he observed. Liu Yingfeng started to switch from a semi-closed loop to an independent website on TikTok in March this year. In order to exchange information, Liu Yingfeng began to establish a seller community, and now has accumulated thousands of TikTok sellers in the US.

Among the 100 sellers in Liu Yingfeng’s core community , 10 sellers operate in the United States, and 20 sellers have switched from Amazon to TikTok Shop. Among them, there are many Amazon sellers with sales of tens of millions or even hundreds of millions of US dollars. Most of the other sellers were once TikTok sellers in Southeast Asia and the United Kingdom, and a small number are new entrants.

Liu Yingfeng is a beauty seller, with daily sales of 10,000 to 20,000 US dollars. " In our group, this is a normal level, " Liu Yingfeng said, " Basically everyone can make at least 100,000 US dollars a month. On average, everyone can actually make 10,000 to 20,000 US dollars a day."

He introduced several cases to En.com. There was a pure American seller who made 17 million US dollars in revenue in the 3C category in half a year, and the highest daily revenue was 600,000 US dollars.

Another seller bought a shop for 8,000 yuan to sell the Internet celebrity bubble machine. It became a hot product after one week. " After this product became popular, one order was placed every minute. He raised the price from 15 US dollars to more than 20 US dollars, and the orders stabilized. He made 3,000 US dollars that day." Liu Yingfeng said that this seller's shop was closed from July to November, but he also made a lot of money ( revenue of 300,000 US dollars ) . The reason for the explosion of orders was that a US expert with 500,000 fans placed an order in his shop, and after shooting a video, the product became popular.

Compared with its dismal performance in the UK, TikTok e-commerce has had a " good start " in the US. In an environment where most e-commerce platforms are experiencing sluggish growth, many sellers have defined this year and next year as a bonus period for TikTok e-commerce in the US, and are continuing to increase investment in order to seize this wave of bonus opportunities.

However, as a new platform that has just been launched in the United States, TikTok e-commerce is still in the running-in period of a new market. The platform rules are still changing, and the development direction and positioning have not yet been fully formed and are still in the exploratory stage. This means that challenges and uncertainties still exist. For sellers, the most direct impact at present is " store closure ".

Store Closures

“ My account was blocked while I was broadcasting. ” “ At least 5 of my stores were blocked .” “ My account was restored after I appealed! ” In a TikTok US seller group, sellers can be seen discussing store closures almost every day.

Every TikTok seller in the US will encounter a store closure . One seller lamented: " I'm tired of it ." The reasons for each seller's store closure are different, and there is no unified pattern.

In order to solve the store closure problem, Liu Yingfeng showed Yien.com a PPT of dozens of pages, which recorded cases of different sellers having their stores closed. The more common reasons for store closures include: fraudulent shipment, fraudulent transportation, abnormal store compliance, violation of TikTok store policies, etc.

Liu Yingfeng explained that if the store information is real, if it is " indiscriminately " closed, as long as the appeal is made according to the normal process, the store can be restored in the end. However, if it is a virtual warehouse, has been complained for a long time (the product quality is not up to standard), or has fake orders, it is difficult for the store to appeal.

In March this year , TikTok encountered a " hearing storm " in the United States, and the regulatory environment was complicated. At the same time, the strategy of opening up the British market with low-priced products in the past two years has proven to be a failure. For various reasons, the review of TikTok's e-commerce in the United States is very strict, to the extent of " indiscriminately " closing stores and " preferring to kill the wrong ones rather than let them go ."

Xiao Chen opened a TikTok store in September. He told Yien.com that it was easy to place orders in the beginning, but by the end of September, the review gradually began. The review was not strict at the beginning, but by the end of October, it became very strict.

" Our stores are basically wiped out. " Xiao Chen said that if it is a purchased store, it is likely that it will not be able to return if it encounters an audit; if it is a compliant store, after the audit is triggered and it is suspended, it will take 3-5 days to submit materials for appeal, which will affect part of the turnover. As for the reason for triggering the audit, Xiao Chen speculated that a surge in sales would lead to an audit. " But basically we can only rely on experience to speculate on the audit mechanism, and the official has not given us any special guidance. " Xiao Chen said.

In order to solve the problem of frequent store closures, Xiao Chen first prepared the goods for shipment in the United States, and then controlled the sales of each store, limiting the sales of each store to 50 orders and only maintaining a few accounts. Xiao Chen sells niche, high-profit products, so he does not need to rush sales, but only needs to reach the right people.

As a store group seller who uses virtual warehouses to ship goods, Danny treats store closures as commonplace.

" Our stores are basically closed every day, without stopping, " Danny said. Closure of stores is not a big problem for him. " If they close 10 of my stores, I will open 50 more."

Large-scale censorship and store closures signal that TikTok's current strategy in the US is to move towards compliance and improve service quality, encourage local shipments, require product quality, and try to eliminate low prices, low-quality products, and behaviors that damage the market, such as fraudulent subsidies and false orders.

Xiao Chen revealed that a TikTok US investment manager once told him that since the method of using low-priced small commodities to harvest consumers has been proven to fail in the UK, TikTok Shop does not intend to adopt a low-price strategy in the United States.

As for the store closure issue, Liu Yingfeng said that since TikTok has just launched its website in the United States and needs to use sales to revitalize the market, there is still a certain degree of leniency for sellers who ship goods from virtual warehouses. Specifically, they can still receive payments normally after the store is closed. Therefore, many virtual warehouse sellers will change stores and continue to operate after their store is closed.

But if you want to develop on TikTok in the long term, compliance is the best route. Liu Yingfeng said that if TikTok's self-operated sellers and full-hosting services are fully launched next year , it will inevitably bring a certain impact to white-label sellers. " At that time, we can only work harder on product selection, content operation and supply chain ." Liu Yingfeng said.

“ Hobby e-commerce ” sprouts in the United States

Tony Yang, co-founder of the American MCN agency 3rd Rock Media, told Yien.com that behind the top-selling products in TikTok Shop are 400-500 influencers promoting the products, and some products even have as many as 700-800 influencers.

From the data of FastMoss, we can see that in the list of influencers selling goods, the monthly GMV of goods sold by the top American influencer VanillaCrush reached 1.5076 million US dollars, and the average monthly GMV of goods sold by the top five influencers exceeded one million US dollars.

Clicking into VanillaCrush's account, you can see that this female blogger with 300,000 followers has promoted almost all the popular products on TikTok: earphones, automatic trash cans, clothes, curling irons, shavers...

In the live broadcast room promoted by TikTok, there are also many local American stores or factories, which display their shelves and factories in the live broadcast room and conduct " store broadcasts ".

In March this year , TikTok announced that it has 150 million active users in the United States, which means that about half of Americans are using TikTok. Since entering the US market in 2018, TikTok has accumulated a large number of content influencers in the United States. These influencers are very popular and are waiting for monetization opportunities.

Since the launch of TikTok's e-commerce site in the U.S., many sellers have found that influencers are very popular in the U.S. Some sellers set up live broadcast rooms and can achieve sales of thousands or tens of thousands of dollars a day.

However, for most sellers, it is still very difficult to market with influencers in the US. Danny told Ennet that in the past month, he prepared a large number of free samples and sent them to influencers, but most of them did not take the next step of marketing after " fleecing the wool ". Liu Yingfeng also said that now to find influencers, you need to send thousands of messages to the group, and then screen them for one-on-one communication. It is very difficult to find influencers with suitable categories and who can fulfill the contract.

As the co-founder of the US TikTok MCN agency, Tony said that influencers are still a new profession in the US. Except for a few influencers who have already emerged, most influencers have not yet understood the logic of TikTok's influencer marketing and have not yet put their heart into it. " The efficiency of cooperation is relatively slow, and some influencers don't reply to messages for a long time. " Tony said.

Tony said that there are three main difficulties for US sellers to find influencers and establish connections on TikTok. First, they don’t know how to screen influencers, and after screening, they send messages to influencers, but the influencers don’t reply or are passive in cooperating. Second, the categories are not accurate, and the influencers they establish connections with don’t match the categories they sell. Third, there are obstacles in communicating with influencers, and there are language and cognitive differences, making it difficult to reach a consensus.

" Influencer revenue is divided into pure commission and paid revenue, and is further divided into top and mid-level influencers based on the number of fans and their ability to bring goods. Buyers have different marketing objectives, such as increasing sales or improving exposure. How to match influencers for marketing based on different marketing objectives involves a lot of experience and technical issues, " said Tony.

The influencer marketing is a new phenomenon in the United States. On the influencer side, there is not enough awareness and professional influencers are scarce. On the seller side, there is a lack of mature MCN service providers to help with influencer marketing. The influencer marketing ecosystem is in its infancy, which means that there are unlimited possibilities and opportunities for both American influencers and MCN agencies from China.

Tony also mentioned how to price influencer collaboration, which is also a key issue at present. Many influencers have switched from content platforms such as Instagram to TikTok, and have adopted the paid model, such as charging one thousand or two thousand dollars for one piece of content, but this is a large cost for sellers. A small number of influencers understand the gameplay of TikTok, have made money from selling goods, and can accept the pure commission model. But most influencers are still in a confused stage. " So now sellers still need to be fully prepared to use influencers to sell goods , and it is best to use the experience and guidance of professional organizations . " Tony said.

Compared with the UK, Americans have a better acceptance of social e-commerce and live streaming. Currently , TikTok's US region is a traffic dividend pool and there is hope that top anchors will emerge in the future.

As for whether live streaming sales can trigger a phenomenal craze in the United States, Tony said he would wait and see, because Americans have a wealth of leisure activities and will not be addicted to watching e-commerce live streaming. But even so, the number of TikTok users in the United States is large, their consumption desire is high, and their acceptance of social e-commerce is high, so live streaming sales by influencers will still be a relatively large market.

Increase investment

" 2024 will definitely be the year when TikTok e-commerce will flourish," FastMoss founder Shi Wenlu told Yien.com.

Liu Yingfeng said that people are asking him questions about TikTok every day . " Everyone is trying their best to squeeze in, " he said.

Danny is very optimistic about the development momentum of TikTok's e-commerce in the US. He believes that the US has achieved very good results after only three months of opening the site, which means that the market ceiling is very high. " To make the same 10 million in net profit, you need to invest a lot of money and time on Amazon, but with TikTok, the financial pressure is small and the return is very fast." In order to seize the bonus period as much as possible, Danny 's next plan is to switch from a store group to a boutique store, prepare goods in overseas warehouses, open up global traffic, and set up an independent team to be responsible for traffic investment, talent invitation, and short video creation.

As the market becomes hotter, more and more sellers enter the market and competition begins to grow. Liu Yingfeng revealed that TikTok has begun to adjust the seller subsidies. For example, for sellers who ship their own goods, the shipping fee was not subsidized if it exceeded $12 before, but now it has been reduced to $8.

As competition intensifies, compliant operations are the long-term solution.

In addition to opening their own stores, TikTok is also attracting more types of sellers. Tongxin CEO Zhang Hewen is a flexible supply chain player in the clothing e-commerce industry, providing boutique B2B services for the clothing export industry. Zhang Hewen said that in the future they will take a brand route and are trying to use TikTok for brand building.

Zhang Hewen is planning to create a content account, shooting content related to environmental protection, charity and other social responsibilities to attract groups with cultural identity. In the video, he will wear T-shirts, bracelets, headdresses and other things that represent brand symbols to cultivate users' recognition of their brand culture.

All kinds of sellers and brands are increasing their investment in TikTok e-commerce.

Shi Wenlu said: " What kind of sellers are suitable for TikTok? First, they must have a global vision, second, they must be determined to go overseas, third, they must have cargo capacity and supply chain advantages, and fourth, they must understand the overseas consumer ecosystem. With these conditions, plus our advantages in content e-commerce, TikTok will be a huge opportunity in the future."

(At the request of the interviewees, Danny and Xiao Chen are pseudonyms)

Black Friday

TikTok