Thursday, December 1 2022

NEW YORK – TikTok appears to be deepening its foray into e-commerce with plans to operate its own warehouses in the United States, the type of packaging and shipping facilities more associated with Amazon or Walmart than the media platform best known for its addictive short videos.

Over the past two weeks, TikTok has posted several job postings on LinkedIn seeking candidates to help it grow and expand its “Fulfillment by TikTok Shop” in the US to accommodate sellers using the app. . According to the listings, TikTok plans to provide item storage, delivery and return options for sellers.

A company spokesperson declined to comment on TikTok’s US e-commerce plans.

But US job listings offer a window into a possible expansion of e-commerce in the United States. In some listings, TikTok says it’s looking for a candidate who can manage a free returns program, plan to move inventory from one warehouse or business to another, and grow its fulfillment service in the United States. United. In another listing for a position in Seattle, the company refers to a global e-commerce team and a team member who will be responsible for building a global warehousing network, noting that its plans could be much more important.

“The e-commerce industry has grown tremendously in recent years and has become a hotly contested space among major internet companies, and its future growth cannot be underestimated,” the company wrote in the job postings. “With millions of loyal users around the world, we believe TikTok is an ideal platform to deliver a whole new and better e-commerce experience to our users.”

Axios first reported on job postings.

Shopping on social media sites, known as social commerce, is a $37 billion market in the United States, led by Meta, which owns Facebook and Instagram, according to Insider Intelligence. ByteDance, the Beijing-based company that owns TikTok, already runs a thriving social media marketplace on Douyin, its sister video app for the Chinese market. The TikTok spokesperson said the company is focused on “providing merchants with a range of product features and delivery options” in places where it currently has e-commerce programs, such as South Asia. – East and UK.

Insider Intelligence projects that around 23.7 million US shoppers are expected to make at least one purchase through TikTok this year using affiliate links or completing a transaction on the platform itself.

Some of these sales are already having an effect. Communities such as #BookTok, a corner of TikTok devoted to literature and reading, have been credited with boosting sales of printed romance books this year. To accommodate more purchases on its app, TikTok announced last summer that it would partner with Canadian e-commerce company Shopify to allow users to buy items directly on the app.

TikTok has stepped up competition with Meta and other rivals, attracting younger users – as well as popular influencers – from YouTube, Facebook and Instagram. The site’s entertaining little clips are served up by an algorithm that often seems to know what people want before they do.

The results are hard to ignore. In July, Meta recorded its first revenue drop in history, in part due to competition from TikTok. YouTube, meanwhile, recently said it would make short-form video creators eligible to join its revenue-sharing program. Previously, YouTube only allowed revenue sharing for longer videos.

Compared to digital advertising, e-commerce is a tiny revenue stream for Meta, and likely will be for TikTok for the foreseeable future. At the same time, TikTok executives are likely looking to expand the company’s revenue streams beyond ads – a market dominated in the US by Meta and Alphabet, which owns YouTube and Google.

Neil Saunders, managing director of GlobalData Retail, said TikTok’s reach and influence help it become a powerful force in advertising and sales and that building that capacity with warehouses and other facilities will help it become a powerful force in advertising and sales. would provide a full service.

“It would both generate additional revenue and improve the quality of the shopping experience for consumers,” Saunders said. But a serious move to warehousing would be a costly undertaking, and TikTok would face established competitors like Amazon and Walmart.

“However, TikTok has a massive following and a massive customer base, so it has more than enough demand to make sense,” Saunders said. “Provided TikTok maintains its popularity, it could pose a threat to incumbents and prove to be a highly disruptive force.”

Others take a different tone.

“That’s silly,” said Wedbush analyst Michael Pachter. “They have no chance of competing and it’s a complete waste of time and money.”


Associated Press writer Barbara Ortutay in San Francisco contributed to this report.


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