Life,  Tech,  Wealth

TikTok Shop Booming in the US Despite Ban Threats: Will Its Success Spread Overseas?

TikTok has a lot of troubles in the United States, and it also meets the changes.

On March 13 local time, the U.S. House of Representatives quickly passed a new bill that could effectively ban TikTok by an unbalanced vote of 352 to 65. Five days ago, a bill introduced by the Energy and Commerce Committee of the U.S. House of Representatives and passed unanimously would require ByteDance to spin off TikTok within about six months or face a ban in the United States.

However, the bill has not yet been implemented and must be voted through by the US Senate before it can be submitted to the President for approval.

TikTok CEO Zhou Shouzi said in a video posted on TikTok that “if this bill is signed into law, it will result in TikTok being banned in the United States… and will cause billions of dollars in losses to creators and small businesses, and 300,000 American jobs are at risk.”

Before this news came out, TikTok was busy for more than half a year. This is because TikTok Shop in the United States saw significant growth in the second half of last year. If successful, TikTok Shop America will become a big growth market outside Indonesia.

Beginning in September 2023, TikTok Shop “exploded” in the US. FastMoss data shows that during last year’s “Black Friday” promotion, TikTok Shop in the United States (November 24,2023) GMV exceeded $33 million in a single day.

The phased success of the United States brings new opportunities to TikTok Shop. In 2024, TikTok e-commerce business is about to expand and layout more developed markets.

In late February, the market reported that TikTok launched semi-closed-loop trailer accounts in eight developed country markets. At present, the internal test online countries include Australia, France, Italy, Germany, Spain, Canada, Japan and South Korea. It is expected that more countries may be opened in the future, covering South America, Central Asia, Southeast Asia, new Zealand and other regions, the news said.

It is reported that in September 2021, TikTok and Shopify cooperated to open semi-closed loop business. Shopify merchants with TikTok enterprise accounts can add shopping labels (i.e.”small yellow cart” external chain) in TikTok Short Video and direct broadcasting rooms, or can also bring window and website on TikTok account homepage. Users can click small yellow cart to jump to brand independent station for transaction.

This function was first launched in TikTok UK and US. Sellers regard TikTok semi-closed-loop account as one of the drainage channels, just like streaming on Facebook and Instagram to get more external traffic for independent stations. For TikTok, semi-closed-loop accounts can also sell goods, but more like TikTok Shop before the official opening of the potential market test water.

The US e-commerce business has just run through, and the “ban” storm has revived. In the face of this situation, TikTok Shop is also looking for other calculations in 2024, such as copying the successful experience of the United States to developed markets such as Europe, Japan and South Korea. In addition, TikTok Shop is not far behind when Temu, Shein and other e-commerce platforms have achieved good results in Europe.

TikTok Shop in the United States, erupting in risk

Since the Trump era, the U.S. government has tried to “ban” TikTok, triggering frequent global debates. The tug of war lasted for several years, after a period of time when U.S. sellers questioned whether to invest in TikTok Shop.

But from TikTok semi-closed-loop accounts to TikTok Shop stores, many Chinese sellers have developed a calm mentality. Recently, a Shenzhen Amazon sold well TikTok brand operation Fay to Xiaguang news agency bluntly,”No matter who controls, certainly will not give up TikTok Shop such consumption scene.”

However, she believes that if TikTok is controlled by the United States, the entire ecosystem of TikTok Shop will be more inclined to American consumers on the one hand and stricter to Chinese merchants on the other hand.”If (TikTok) initiative is in China, it will give more or less opportunities to domestic merchants.”

Danny, the manufacturer of Qingdao Pingdu false eyelash industry belt, started to carry Short Video in TikTok Southeast Asian market since June 2022, and entered TikTok Shop American market in June 2023. He also owns three types of stores: cross-border store, ACCU store and local store. He also told Xiaguang that he was used to news that the United States wanted to “ban” TikTok from time to time and was not too worried.

However, since last year, TikTok Shop stores in the United States have opened slowly and the entry threshold is high, which is enough to show TikTok’s cautious attitude towards the US market.

TikTok Shop in the United States has been tested since May 2023. At the initial stage, only the local store mode in the United States is allowed, that is, the store can be opened only if it has local qualifications such as American company, American business license, American legal person (no more than 25% of Chinese shareholders), etc., and has overseas warehouse in the United States and can deliver goods locally. “Our store requires second, third, and fourth examinations. There are many requirements, and they are very strict.” Danny pointed out.

Since July 2023, TikTok Shop ACCU stores in the United States have been opened for settlement. The so-called ACCU stores, namely “Chinese-funded American cross-border stores”, as the name implies, are American companies applied by Chinese legal persons (Chinese people account for more than 25% of shares). The stores are American business licenses, but local warehousing and local delivery are also required.

TikTok Shop ACCU stores in the United States, ordinary cross-border stores (China business license application) also specifically require that “Amazon store annual sales GMV not less than 2 million US dollars”, specifically to attract Amazon sellers to settle in.

Danny had done domestic chatter e-commerce before, and had no experience in cross-border e-commerce. In order to enter the TikTok Shop American market, he found the “agent” intermediary emerging at that time and opened the store with untrue information. In August 2023, he officially registered a number of stores, but by October 2023, several stores had been closed.

According to market information, in October 2023, TikTok Shop closed 400,000 stores in the United States. One is that the stores are not compliant, such as incorrect data, and the other is that the stores violate discipline, such as virtual warehouse delivery, order swiping, wrong goods, etc.

At the end of last year, Danny found Amazon seller friends to cooperate, using the real Amazon store flow, re-registered the US store, and gradually entered a stable business state.

He also pointed out a phenomenon, Chinese sellers are very difficult to do in the United States small shop “live with goods” mode,”Live broadcast a little better, Will limit the current, Limit the traffic from China, For this I lost 300,000 yuan.” TikTok, he believes, is avoiding political risks.”The Americans don’t want the Chinese to earn this money.” Therefore, the company gave up the store live broadcast mode, mainly cooperated with North American people, and carried out Short Video with goods.

The risk of “ban” TikTok continues to exist, but TikTok Shop U.S. sellers do not leave, which is related to TikTok Shop’s performance in the U.S. market. Compared with Southeast Asia and Britain, last year TikTok Shop America is more suitable to be described as “outbreak”, the data is more eye-catching.

Before doing Southeast Asia market, Danny did not do TikTok Shop shop, but adopted MCN organization’s talent mode, help other shops bring goods,”Southeast Asia market is too curly now, we want to partial profit place.”

The United States is a highly profitable market. From November 2023 to the present, Danny’s weekly sales in a single store in the United States range from $6000 to $15,000.”To be honest, because the threshold is high, the number of sellers in the United States is still small, and there are not many in each field. As long as the product is made, it will sell explosively. There are often situations where there is not enough to sell.”

Gigi, a toy seller, entered TikTok e-commerce in 2022, starting from TikTok Shop in the UK and then to TikTok’s semi-closed-loop account in the US. Now he has opened TikTok Shop in the US.

Starting from TikTok Shop UK cross-border store, enter TikTok Social commerce track, but due to poor market data, profit is not considerable, only a year, Gigi team withdrew from the UK market.

In the U.S. market, live broadcasts usually reach hundreds of thousands of times, and the team’s best live broadcast, sales of $15,000,”TikTok Shop refreshes our perception again and again.” Less than half a year after the opening of the store in the US, the monthly sales of the team have exceeded one million US dollars.

According to “TikTok Shop at the Right Time for Going to Sea in the United States” of Guoxin Securities ‘e-commerce in-depth research series report, it is estimated that the ceiling of TikTok Shop GMV will be USD 100 ~ 200 billion. According to the annual growth rate of 5% of American online social network, TikTok e-commerce share can reach 7%~15%.

“It is expected that overseas supervision of TikTok will continue to exist in the future, and TikTok Shop America will strengthen its ties with the local economy by introducing more local merchants and people to gain more chips.”

Online 8 countries semi-closed-loop accounts, global test developed markets

TikTok Shop wants to expand its business to more developed markets, and this task will be handed over to cross-border sellers who receive the first wave of dividends in the US.

Xiaguang Society has verified that TikTok’s semi-closed-loop accounts in the above 8 countries have started internal testing. At present, only some fixed invitation sellers have opened this function.

At the end of February, Cheryl, founder of Kikstart Ecom, an official Shopify service provider in Canada, told Xiaguang that she had learned that a semi-closed-loop account was about to go online in Canada, but had not yet opened for application.

Wang Yuqiao, founder of NOVOLOULAN, Spain’s official Shopify partner, also told Xiaguang that she learned that TikTok will launch a semi-closed account in Spain in the second quarter, but the specific opening time has not yet been determined.

At the end of February, Danny told Xiaguang that he had submitted semi-closed-loop account application materials, but it had not been approved for more than a week.

He pointed out that semi-closed loop needs “white” account, also will be independent station seller’s TikTok enterprise account to add “white list,” so that you can hang “small yellow car,””white newspaper has a lot of requirements, advertisers flow water, etc., such as a continuous Sunday consumption of more than $1000 (launch fee) account, only have qualification declaration.” It depends on the number of places the TikTok account manager has on hand, he said.”If the seller (ad) consumes more, the better it is for him (account manager), you will be named.”

On March 8 or so, Danny reported again that TikTok officially stopped semi-closed-loop account approval,”The official said to stop for a while adjustment, After a while estimated to open again.”

However, Danny also said, New market development is not urgent, First “maintain the number”,”To do the account content well, Can sell goods.” In his view,”TikTok+ independent station” mode, essentially not TikTok station trading, platform does not assume responsibility,”(TikTok) want us to run a circle, go to these countries market try water.”

Starting at the end of February, Danny asked the anchor to “test broadcast” on the corresponding account, and the later account could be “trailer”, so he could start carrying goods.

Just learned that TikTok is about to launch semi-closed-loop accounts in 8 developed countries, Gigi also applied for the first time, and made an appointment with TikTok customer manager for dinner.

“Because we have a good relationship with the account manager, our first batch of accounts have been opened (‘small yellow vehicle’), which can cover these eight markets.” She told Xiaguang that since February 23, semi-closed-loop accounts have been approved.

But similar to Danny, she also thinks, Don’t worry about “trailer” Selling goods, To first maintain account,”Have a number in hand don’t panic, But not so fast, Now the profit of American small shop is quite considerable, There is no need to disperse energy to some unknown market.” She also pointed out that if the account weight is not done, no matter how good the anchor can not sell goods.

At present, Xiaguang Society judges that the sellers of TikTok Shop in the United States will become the first players in the eight countries of Europe, Japan and South Korea to be developed. That is to say, sellers who run through business in the US market will directly help TikTok Shop business and copy successful experiences to these eight new markets.

Open up more markets, TikTok Shop wins geometry?

From semi-closed loop to full closed loop, TikTok took nearly three years to officially launch its e-commerce business in the United States.

As early as 2021, there were independent sellers who tested the TikTok e-commerce ecosystem in the United States through semi-closed loop mode. In 2023, TikTok Shop stores in the United States gradually opened. In September of the same year, TikTok closed its semi-closed-loop account in the United States and officially launched closed-loop e-commerce business.

At home, chatter and Taobao also cooperated with semi-closed-loop e-commerce mode before 2020, chattering for Taobao shop drainage, and earning seller service fees and advertising fees. However, in October 2020, chatter cut off Taobao external chain, started the closed-loop mode of e-commerce in the station, and changed from cooperation relationship to competitor with Taobao.

From a semi-closed-loop account to a full-closed-loop e-commerce, it means a change in TikTok’s role and an advancement from an advertising platform to an e-commerce platform, which is not easy. Especially in today’s volatile global situation, TikTok has encountered official policy “difficulties” in the US, Indonesia and Middle East markets, unwilling to take risks easily and once again falling into a passive situation.

Danny bluntly said, Because of political reasons, TikTok in the United States in a harsh situation,”TikTok may also want to test the attitude of these countries (The above eight countries) government, If also very strict management, Will delay the opening (Small shop); If the government acquiesces in business, Can continue to do (Closed loop e-commerce).”

Before TikTok Shop launched, Gigi team used TikTok semi-closed loop account to enter the US market.

She pointed out that the semi-closed loop mode as a transition, and the full-closed loop shop gap is still very large, especially in the conversion rate. “Click from TikTok semi-closed-loop account to independent station to clinch a deal, there is no platform endorsement, but in TikTok store directly complete the transaction, customers will be more assured, trust will be strong, conversion rate will be very high.”

Although the semi-closed loop model is a test of the market, TikTok has cultivated users ‘habit of shopping in social scenarios in the United States, and when TikTok Shop was launched, it immediately achieved a performance explosion. However, whether the same road can be successfully resumed in Europe, Japan and South Korea requires a question mark.

TikTok Shop UK market has been unable to achieve scale effect.

Gigi said that when the UK market is good, a live broadcast can sell for £ 1,000 to £ 2,000. “Remember that we did the first live broadcast, and the scene was broken ten thousand times. It was an encouragement. But I haven’t made much money in a year in the British Quarter.”

In March last year, TikTok Shop UK policy changed, requiring cross-border stores to stock up in advance. Given the low margins and soaring costs, Gigi’s team abandoned the UK market. “The volume of the British market does not go up, the market development is very slow, at that time to do together with the peers, many have disappeared, few peers survived.” As soon as the American section opens, we’ll immediately turn to the American section.”

In terms of population base, the United States, with 170 million TikTok users, is unmatched by major European countries such as Britain, Germany, France and Spain. In these countries with only tens of millions of people, it is difficult to develop Social commerce markets.

Of course, there are precedents for Chinese cross-border e-commerce platforms that have successfully entered the European market. According to the statistics of German e-commerce data analysis platform ECDB, SHEIN has a market share of more than 10% in the field of fast fashion brands in Spain, Italy and Greece, becoming the mainstream brand in many major countries. In addition, Temu is grabbing traffic in multiple markets, and AliExpress has become one of Spain’s leading e-commerce platforms.

Because he has lived in Japan for 10 years and has local companies and resources, Danny wants TikTok Shop to enter the Japanese market as soon as possible so that he can invest in both the US and Japanese markets, reducing risk and gaining more revenue.

According to official information, TikTok Shop has set a $50 billion GMV target for 2024. Outside Indonesia and the United States, TikTok Shop is time to explore more markets, otherwise this year’s performance is ideal or will fall short.

error: Content is protected !!