A few days ago, according to a report from the Financial Times, TikTok temporarily abandoned its plan to expand its live streaming business in the United Kingdom and the United States, and speculation about the development of TikTok’s e-commerce business has been endless for a while. Soon, TikTok officials refuted the rumor, and the development of its e-commerce business sparked heated discussions in the industry.
According to relevant media reports, the transaction volume of TikTok’s e-commerce business in 2022 is targeted at US$2 billion, and it is planned to reach US$23 billion by 2023, an increase of about 10 times. Many users are skeptical of this goal, believing that the development of TikTok in the e-commerce field in recent years has not been smooth sailing, and it is difficult to support such an ideal development plan.
In 2021, TikTok will bring the business model of live broadcast delivery overseas and announce the launch of TikTok Shop. However, in the face of the continuous setbacks of overseas giants and overseas markets, TikTok's expansion of overseas live broadcast delivery has been greatly Number List hindered.
According to relevant media reports, in June this year, TikTok's Chinese management team clashed with London employees and triggered a wave of departures. The fuse of the incident was a sentence made by the head of its European e-commerce at the meeting - "As a capitalist, I don't think companies should provide maternity leave." This remark caused dissatisfaction and boycott of British employees. TikTok said that all systems follow local laws and regulations and have begun self-examination.
Whether from the perspective of revenue or human resources, the development of TikTok's overseas e-commerce business has encountered huge obstacles and impacts, which makes people wonder, can China's mainstream e-commerce model work overseas?
1. Price involution, bad money drives out good money
TikTok's "first shot" to seize the overseas market started from the price war, and the price here should be viewed from two aspects: the unit price of the product and the labor cost of the anchor with the goods.
In order to attract merchants to settle in, TikTok did not set a high entry threshold in the early stage of development, and set up local return warehouses, bound accounts, and merchants’ products to open their own stores. To a certain extent, it affects the shopping experience of overseas users. At the same time, small and medium-sized Chinese merchants use TikTok as a channel to open up overseas markets, and they are fighting "price wars". 0.99 free shipping and big-name products are often sold at low prices, which reduces the competitiveness and motivation of overseas local merchants. .
In addition, problems such as copycats and "selling dog meat with sheep's heads" frequently occurred, and some sellers even only sent empty boxes, and shopping guarantees were questioned by consumers. Although low prices and new shopping methods have brought TikTok's early traffic to an explosion, its GMV and sales performance are not satisfactory, sellers can't make money, buyers are worried about after-sales problems, and TikTok has been questioned at both ends of the sales chain .