fbpx

TikTok e-commerce story continues

However, due to Amazon’s domination, transferring these numbers over into the west presents a challenge. TikTok has been experimenting with adjustments in its shopping features in the US since 2020 and recently moved to get into the shipping side of the business. It plans to hire more than a dozen US-based staff to work in areas like fulfilment and supply-chain logistics, according to current listings on its jobs portal. And several of its new Seattle and Los Angeles-based job posts, first spotted by Axios, tell applicants they’ll assist with the “planning and solution design of fulfilment centres [sic],” without specifying a location.

Yet logistics experts are concerned if TikTok plans on looking anything like Amazon. “If you want to be anything like what Amazon has built you are $100 billion behind,” Matthew Hertz, co-founder of e-commerce logistics consultancy Second Marathon, said. 

However, according to a logistics executive with knowledge of the company’s priorities, and industry analysts, TikTok is more likely to model off Chinese exemplar and less off its western competitor Amazon. 

In regards to what the ultimate goal is, TikTok announced in September 2021 that it plans to offer a full-service e-commerce solution that would include shipping and fulfilment, with the rollout of its social commerce product, TikTok Shop. In July, China-based tech news site LatePost reported that TikTok planned to launch warehouses in the UK in a project referred to internally as “Aquaman.”

As with most TikTok antics as of recent, competitors like Instagram and YouTube are following in its footsteps in testing an in-app commerce solutions, though neither company is attempting to handle warehousing or shipping on behalf of their sellers.

TikTok’s move into fulfilment isn’t new for its parent company ByteDance, which already offers its own logistics solutions within Douyin’s massive e-commerce business. Features released on Douyin can often be a harbinger of what’s to come next on TikTok, experts have told Insider.

“You cannot underestimate the size and power and potential that they have,” said Kevin Collins, president of ACI Logistix, referring to ByteDance. 

Shein is one Chinese company that has managed this transition successfully (although unfortunately – ew, fast fashion), by focusing on the niche but fast-growing field of cross-border e-commerce logistics. Shein’s US president George Chiao told the Wall Street Journal in September that three US warehouses would shave three to four days off normal shipping times of 10 to 15 days. 

Where the company has a leg up in predicting demand for influencer sales is with its data on how its users engage with influencers and their product drops. With high spikes and low lulls in order volume tied to influencer-created and promoted products, logistics specialists have emerged within this unusual subset of US fulfilment businesses to handle the inconsistency and unpredictability of influencer-driven sales.

“It’s almost going to need to be a collaboration between the data scientists and TikTok and the influencers’ knowledge of their own audience,” said Rick Watson, CEO of RMW Commerce Consulting. “If the forecast is wrong, then it’s a disaster. It doesn’t matter that you have fulfilment if there are no people in the facility to handle the demand or you didn’t buy enough inventory.”

Several of TikTok’s open logistics and fulfilment roles have the primary goal of researching and developing a plan for a US network, which suggests the company has not entirely decided on a strategy. 

A further hurdle is general pessimism surrounding other companies’ attempts to launch similar programmes. Japanese e-commerce company Rakuten acquired two US fulfilment companies in 2019 only to combine them and sell them back to the founder of one this year. eBay set out to offer logistics services through a network of partners in 2019, but the program never launched. Shopify has been through multiple iterations and plans to spend billions to create a fulfilment network that experts say will still not come close to Amazon’s footprint or capability.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts