TikTok’s in-app “Shop” feature: transforming ecommerce with livestreaming

TikTok, the popular social media platform known for its short-form videos, has been making significant strides in the world of ecommerce. With the introduction of its in-app “Shop” feature, TikTok aims to replicate the success of its Chinese counterpart, Douyin. The company has been testing this feature in the UK, the US, and several regions in Asia, signaling its ambitious plans for the future of shopping.

Patrick Nommensen, the General Manager of UK ecommerce at TikTok, sheds light on the details surrounding the Shop feature and its impact on brands and creators. Nommensen, who joined ByteDance through the acquisition of Musical.ly in 2017, has been overseeing the development and growth of TikTok Shop, making it one of his primary focuses.

Since its initial launch in the UK two years ago, TikTok Shop has gained traction among small and mid-sized merchants. However, the platform has been actively working to onboard larger brands such as L’Oréal to expand its reach. Nommensen highlights the unique selling points of TikTok, emphasizing the platform’s community-driven nature and discovery features that set it apart from other ecommerce platforms.

To facilitate a smooth onboarding process, TikTok has established dedicated industry teams that assist merchants from pitching and introduction to best practices and account management. The platform also offers API solutions to integrate TikTok Shop into a business’s existing infrastructure, enabling seamless order processing, customer support, and warehousing.

Beauty and fashion have emerged as the leading categories for successful sales on TikTok Shop, while other sectors like home and living, electronics, jewelry, and collectibles are gaining momentum. In terms of commission fees, TikTok currently charges merchants a 5% commission, comparable to Instagram’s selling fee and lower than Amazon’s typical rate of 8% to 15%. Nommensen mentions that this rate may be subject to periodic evaluation. TikTok’s global shopping expansion has experienced some challenges, with reports suggesting difficulties in attracting merchants. Despite this, Nommensen assures that TikTok remains committed to its global ambitions but has decided to focus on serving existing markets more effectively before scaling up further. The expansion plans in the US, however, are still on track.

In addition to benefiting merchants, TikTok Shop also provides earning opportunities for creators through an affiliate model. Creators can earn a commission when they successfully sell a brand’s product. Merchants can choose from three plans: “Shop,” “Open,” or “Targeted,” each offering different commission rates and selectivity in partnering with creators. Nommensen advises merchants to benchmark commission rates against popular affiliate platforms to set appropriate percentages based on the product category.

While livestream shopping is still gaining traction in Western countries, Nommensen believes it holds great potential on TikTok. Livestreaming allows for personal interaction between creators and customers, fostering customer engagement and loyalty. Though short-form videos currently dominate TikTok’s ecommerce landscape, Nommensen anticipates that livestreaming will increasingly become the preferred avenue over time. TikTok’s foray into ecommerce through its Shop feature signifies the platform’s commitment to revolutionizing the way users connect with brands and make purchases. With a focus on community, discovery, and the integration of livestreaming, TikTok is poised to shape the future of social commerce.

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