TikTok Recently announced a new way for people to shop products on TikTok. They’re calling it TikTokShop. This is going to be an in-app way to purchase items directly from the feed, shops and TikTok’s marketplace. We are going to dive into how this TikTok shop will work, how consumers will react to it, and how to keep your kids from spending more money and time on TikTok.
How will it work?
TikTok Shop will be directly integrated into the app in tagged products. The For You page will have a link where businesses can call out products on their page. These products will be displayed as product tiles on their profile, complete with reviews, and they even have the option to curate custom collections.
In addition to this, there will be a dedicated Shop Tab, where businesses can display their products and customers can discover promotions, manage orders, and get product recommendations. TikTok Shop also offers an Affiliate Program to create commission-based product marketing opportunities. This program gives creators a new avenue to monetize their content by promoting products through short videos and livestreams. For additional visibility, businesses can take advantage of TikTok Shop Ads to promote their products directly within the app.
All of these features and more are sure to drive some sales in the TikTok community. According to a study done by eMarketer 39.5% of social uses on TikTok will make at lease one purchase in a calendar year.
How will consumers react?
Consumers are likely to have a mixed, but overall positive, reaction to TikTok's entry into e-commerce and fulfillment.
We think that the convenience of shopping directly through a platform where they already spend a significant amount of time is likely to be well-received. Imagine watching a viral video and being able to purchase the featured products right then and there, without having to switch apps or platforms. It appears that the actual purchase process is cut down to a few simple steps, which eliminates the need to switch applications. The easy process will likely lead to impulse buying.
However, one might find it somewhat annoying to have ads, products and promotions scattered throughout the page. For example, Instagram launched it’s shop feature in 2020. This caused some pushback and instagram later replaced this section with Instagram Reels. This commerce-oriented shift on TikTok could also clutter the user experience with more promotional material, making some users wary of commercial overload
However, TikTok's approach to entertainment focuses on a dynamic and an interactive experience. The seamless integration of shopping on the app is a bit more seamless and convenient then their counterpart- Instagram.
What is “Fulfilled by TikTok”?
Fulfilled by TikTok is a way for TikTok Shop merchants to handle logistics. TikTok will handle the heavy lifting of storage, picking, packing, and shipping. It will be a an all-in-one service in which merchants can pick and choose the products that they wish to have fulfilled by TikTok. Once they choose the products they want to store, they will sign over the stock. Tiktok will pick, pack and label their items before shipment. Then Tiktok will integrate into the merchant's online store and ship the items once they are ordered.
TikTok Shop charges fees for warehousing, shipping and other added value services such as labeling, pre-packing, and inserting leaflets. Here is an outline of their charges: LINK
'Fulfilled by TikTok' is a game-changer, not just for TikTok but for the whole e-commerce scene. Think less stress for merchants and faster shopping for shoppers. It's the kind of move that makes everyone in logistics, like All Points, sit up and think, "Okay, how can we level up?" On a call with our Director of E-Commerce, he said, “This is going to change the game for e-commerce in general. TikTok is making it easier for sellers and buyers, which will lead to more sales and more growth for the platform.” We think that this change may come with some pushback from users at first but will overall become accepted as the norm. With major firms like Meta, Twitter, and now TikTok launching e-commerce sections on their platforms, it’s only a matter of time before they tap into the Amazon market.