TikTok Shop – The World Is Eyeing a Global E-commerce Expansion and Shaping the E-commerce Market

TikTok Shop – The World Is Eyeing a Global E-commerce Expansion and Shaping the E-commerce Market

Short video applications have been growing in recent years. The most well-known short video apps, in addition to the Kuaishou App, which initially took over the market, are Douyin and TikTok.

Douyin’s slogan is “record beautiful life” by offering something cool, trendy, and young.

After Douyin started to roll out its live broadcasting campaign in 2020, it organised the first e-commerce shopping festival, “Douyin Good Products Festival,” the same year. There were over 10 billion people who visited the shopping festival throughout the event. 

Douyin live broadcast has sprung up and created many live broadcast scenes.

Since then, Douyin has evolved into an e-commerce platform, enabling much more features for e-commerce by developing features like shop buttons, shopping carts, and Douyin Store.

Users can fulfill all of Douyin’s e-commerce functions within the app, from inciting customer desire to purchase the product to minimising temptation and encouragement to shop.

TikTok, known as the international version of the Chinese successful short video app Douyin, became a global hit after the outbreak. TikTok app is currently available in 150 countries and has amassed more than 10 billion active users monthly. 

TikTok has developed TikTok Shop, expanded its presence in Southeast Asia, and launched the small shop function, all in accordance with the development track of Douyin in China. It has also started to realise the closed loop of e-commerce functions. When watching videos or live broadcasts, users have the option to click to view the products and place an order. 

TikTok is replicating Douyin e-commerce in Southeast Asian nations, striving to achieve a closed loop of e-commerce functions and establishing a TikTok Shop. 

Through the use of big data analytics, TikTok influencers were able to recommend products to audiences and fans. When they’re ready to place an order, customers can add items directly to their shopping cart in TikTok. The entire procedure is completed within the app, delivering a closed-loop system for online transactions. TikTok Shop is prepared to regain the Southeast Asian nations’ share of the long-running war between Shopee and Lazada in e-commerce by emulating the successful model of Douyin in China.

Beginning in 2020, Douyin had approximately 500 billion GMV (gross merchandise turnover); from that point through 2021, Douyin’s e-commerce GMV increased by 7.9 times year over year. Such growth momentum suggests that it will soon overtake Taobao and Pinduoduo.

Cloudflare has crowned a new champion: TikTok was the most visited site on the internet in 2021. According to Cloudflare, TikTok first started topping the charts as the most visited site in February 2021. In August, TikTok consistently ranked Number One each month for the rest of the year.

In TikTok e-commerce, mature firms with strong marketing capabilities have a higher chance of succeeding. For instance, the Chinese fast fashion company SHEIN, which is getting ready to go public, collaborates on TikTok with a significant number of KOLs and KOCs through brand activities that motivate users to create content and sell products. Collaboration among bloggers and other actions has received significant exposure. 

SHEIN, a Chinese fast fashion brand, has increased its exposure by collaborating with numerous KOLs and KOCs on TikTok.

In general, people who stumble across ads or similar products promoted by businesses through search generate the majority of the traffic to e-commerce platforms. This is the conventional “people shopping for goods,” as opposed to Douyin, which is based on products and operates according to byte-based algorithms. Traffic is dispersed based on how well-liked the video material is, therefore the product will be shown to interested users in accordance with the algorithm.

The search function will be replaced by an algorithm in a “TikTok Made Me Buy It” scenario, and every product that a user can access is sent to him in accordance with user behaviour. 

For instance, customers will continue to search for and purchase cleansing oils over time. Douyin employs algorithms to match potential customers with customised product material, promoting makeup-removing wipes to Douyin users who enjoy watching makeup-removing videos in order to trigger users’ needs through content.

In addition to identifying potential customers based on consumer profiles and data found through social connections, content, and other gameplay, consumers with the same label may be attracted by enticing users to stay, comment, or be encouraged to click and share high-quality video content. This creates a virtuous circle.

In conclusion, TikTok Shop is still growing in relation to the Douyin e-commerce model, and Malaysia’s future digital marketing strategy will adapt in line with this. 

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