TikTok’s Chinese merchants are quiet

There is still a long way to go before making big money.

April, TikTok electricity suppliers in the UK function has been opened, but the last two months, China’s cross-border electricity business circles began to discuss related topics from. It turns out that since June, TikTok UK has opened a cross-border store function, inviting Chinese cross-border sellers to settle in. After passing certain qualification reviews, Chinese companies can directly open TikTok shops and sell their products to British consumers.

TikTok has a huge number of international users. According to data from the market research agency Sensor Tower, since 2018, Douyin and TikTok have won the global entertainment application download list for three consecutive years, and the first half of this year is no exception. Douyin and TikTok are expected to receive 380 million downloads in the global App Store and Google Play, making them the world’s most downloaded apps in the first half of the year.

Prior to this, most of TikTok’s revenue came from advertising and in-app purchases. Sensor Tower data shows that in the first half of this year, Douyin and overseas version TikTok in-app purchase revenue is expected to exceed US$920 million, an increase of 74% year-on-year, and it continues to top the global entertainment application revenue list.

Ran Caijing learned that TikTok is actively developing its e-commerce business and has now connected to one million independent merchants under Shopify. According to foreign media reports, in December 2020, TikTok and Wal-Mart tested live delivery of goods in the United States . In February and April this year, they tested the small store functions in Indonesia and the UK respectively. In May, it also launched the live broadcast in the United States. PC version.

Virginia, the operator of TikTok’s short video, told Ran Caijing that TikTok stores can truly implement on-site transactions, which will undoubtedly greatly increase the traffic conversion rate. Google’s social platform for draining traffic, the chain of draining traffic, is extremely costly. Now that small stores are open and videos come with a small yellow cart (shopping cart), TikTok truly has the nature of an e-commerce.”

A large number of Chinese cross-border e-commerce practitioners are obtaining the qualification to open TikTok UK stores through various channels and are beginning to try to make the first pot of gold. Lin Sheng from Guangzhou told Ran Caijing that in June, he obtained the invitation code of TikTok’s British store, registered a British account, and is now starting to do live broadcasts. At present, 10-20 items are sold in a single day. At the beginning of 2020, Lin Sheng’s company began to operate multiple accounts on TikTok’s US site. Now the number of fans is as small as 100,000, as many as 1 million. “In fact, these are of little significance to us, because the ability to monetize is not strong, we now value A section of live streaming with goods.”

It should be noted that TikTok’s e-commerce business has just begun, and the soil for “social e-commerce” needs to be cultivated. Levis in Wuxi also opened a small shop in the UK. He told Ran Caijing, “The conversion rate of small shops is very average now, and the British have not developed the habit of shopping on TikTok.”

With the influx of “gold diggers”, Ran Caijing found that many “TikTok trainers” began to draw heads to start classes , hyping up TikTok’s “traffic bonus”, “quick realization” and other ” gold nuggets ” potential. The courses range from several thousand yuan. It costs tens of thousands of yuan. Some “trainers” can sell a full set of operation tutorials without even opening a small shop. Lin Sheng commented on this, “Not many people make money with TikTok, and those who engage in (TikTok) training. It’s making money.”

TikTok's Chinese merchants are quiet

Source of U.S. account on TikTok by Lin Sheng  / Screenshot of Ran Caijing

TikTok operator and service provider KING also told Ran Caijing that the TikTok store is still in the stage of invitation and registration, and the company’s turnover must be more than 20 million yuan or obtain qualifications through internal push. “All kinds of trainers on the market claim to spend money. It is false to be able to buy places to register. At present, there are not many Chinese merchants in TikTok stores. The official requirements are stricter. Merchants need to have strength, such as a complete supply chain, and products that can supplement TikTok’s section needs to be eligible to open a store. “

The cross-border e-commerce market is huge. According to customs statistics, China’s cross-border e-commerce import and export totaled 1.69 trillion yuan in 2020, an increase of 31.1%. Among them, exports were 1.12 trillion yuan, an increase of 40.1%.

But this is also an old battlefield with many players. Alibaba first started, in April 2010, its AliExpress went online , allowing domestic sellers to directly sell products to overseas consumers. In 2014, SF Express launched its own cross-border e-commerce business “SF Express”, and Xiaohongshu also launched its self-operated e-commerce “Welfare Agency”. Users can directly purchase a variety of Xiaohongshu’s self-operated overseas products. In 2015, JD.com announced the official launch of its global shopping business. At the beginning of 2019, Pinduoduo began to develop cross-border e-commerce and launched Duoduo international cross-border projects. According to foreign media reports, recently, YouTube announced that it will be straight in its application broadcast shopping was gray test. Prior to this, companies such as Amazon and Facebook have already ended.

“TikTok has traffic, and e-commerce is one of the best ways to commercialize. Therefore, it is not surprising that it is an e-commerce.” According to industry insiders, for TikTok, the advantage is that related businesses directly copy Douyin’s Successful experience is enough, but the infrastructure of cross-border e-commerce, such as logistics, is not complete in China. In addition, the laws and regulations of different countries are not the same. These are problems that must be solved. From this perspective, TikTok and Chinese merchants doing business on its platform still have a long way to go if they want to make a lot of money on cross-border e-commerce.

Chinese merchants enter the market

Lin-sheng’s company had to do the main US market to “TikTok + independent station” mode, that is, Shopify independent station sellers, “independent station itself is no traffic, have to rely on our own drainage, a bit like the country have praised the mall, TikTok is one of the social media that we drain.”

Previously, they mainly sold watches for the US market, but Lin Sheng said frankly that before TikTok’s conversion rate was average, it was difficult to make money. “Independent website URLs can only be placed on the account homepage, and the path to monetization is very long. First, you can use TikTok videos. Users rarely log in to our homepage and cannot see the link we put on the homepage. Even if some people log in to the homepage and see the link, they don’t necessarily know that they can shop .”

TikTok's Chinese merchants are quiet

Source of independent stations linked on TikTok  / Screenshot of Ran Caijing

In February, the TikTok Indonesia store started to go online. A Chinese friend of Lin Sheng in Indonesia used TikTok to sell watches live. Now he has been doing this for several months and can sell 60-70 orders per day, with a daily sales of about 6,000 yuan. about. Inspired by this friend’s practical experience, Lin Sheng formed a live broadcast team and planned that his British store will also mainly adopt the live broadcast mode. He said, “Now whether it is video or live broadcast, you can hang a small yellow car. , The user knows this is available for purchase when they see it, and when they click into it, they will directly go to the purchase page. This conversion rate will definitely increase.”

Lin Sheng said that the mode of operating the TikTok store is not much different from the domestic trade. He sends the goods to the Dongguan warehouse and only bears this part of the logistics cost, and he does not need to worry about part of the logistics from the Dongguan warehouse to the UK warehouse. Ran Caijing verified with a number of TikTok British store merchants and learned that TikTok currently has a warehouse in Dongguan, Guangdong. Domestic merchants can send goods to the warehouse. TikTok is responsible for follow-up logistics. The UK has also set up a transit warehouse. The entire logistics system has been More complete.

Levis just started TikTok in December 2020. It is similar to Lin Sheng. Because he knows TikTok’s domestic investment manager and got the registration invitation code, he is now a small British store merchant. But unlike Lin Sheng, Levis prefers the “TikTok+independent station” model. He told Ran Caijing that the team created 50 TikTok accounts and did short-video matrix marketing. He hits explosive products by himself. “Sometimes it compares Downturn, but if a product explodes, daily sales can reach six figures (RMB).”

At this stage, four of Levis’s colleagues have opened small shops in the UK, but the conversion rate is low. “TikTok is not strong in commercialization abroad, and the US market is a little better, but the UK is really not good. They did not think about it. Buy things from above. Indonesia is the same, there is still a long way to go.”

Since last year, KING’s company has also shifted to the development of TikTok business, and the team currently has dozens of people. Prior to this, they were domestic Douyin e-commerce companies, and they also managed accounts on behalf of many brand merchants. The company has a large number of supply chain resources. Last year, they also started to do independent stations for cross-border e-commerce, and launched advertising business on TikTok upper social platforms, mainly for the European and American markets. He told Ran Caijing that TikTok’s current conversion rate is still in the breakthrough stage, and monthly sales are now about 1 Ten thousand US dollars, “Now that the British store is open, we are also ready to start testing live delivery, the official will also give us traffic support, and the conversion rate should be improved next.”

In addition, KING’s company also helps various businesses to operate accounts on TikTok. The team is mainly studying TikTok selections. “We will study popular videos and analyze foreigners’ points of interest. Product videos must also be novel, interesting, and capable. Only by displaying the characteristics of the product within 10 seconds, the traffic and conversion will be good.”

At present, their British store is still in its infancy, and the conversion effect is mediocre. However, KING revealed to Ran Caijing that the monthly turnover of TikTok, the leading cross-border e-commerce company in China, has reached one million US dollars.

Potato chips from Guangzhou are also on the sidelines, preparing to enter the TikTok market, but there are no plans to open stores for the time being. “We plan to do TikTok account for the United States, some locals do like to watch the original video, first raised numbers, smoke powder, with a flow amount of the then consider the shop thing.”

Prior to this, the potato chip team has been doing Amazon cross-border e-commerce business for several years. Except for India, Singapore, Poland and other markets that have not been explored, basically the entire site is doing it. The core is mainly in the European and American markets, followed by Japan. Product categories are also very rich.

He pointed out that the domestic supply chains of the Pearl River Delta and the Yangtze River Delta have unique advantages, and there is still much to be done for China’s cross-border e-commerce sales abroad. He plans to make a beauty series brand on TikTok. “In the future, I hope to be able to do it. Girls see our skin care and makeup videos, understand these knowledge, and can also buy all the products they need from us. Solve the purchase needs of skin care and makeup products in a stand-alone manner.

E-commerce started

Due to scale limitations, Virginia has not yet been able to open a small store in the UK. Her team mainly operates TikTok expert car numbers. “The TikTok account in the vertical field has 100,000 followers. You can apply to become an Indonesian/UK expert car from July. No., to bring goods to small shops in Indonesia/UK and earn commissions. This is much easier than selling goods as an independent station.”

In her opinion, it is not easy to get traffic on TikTok now. Previously, Chinese users moved the content of domestic Douyin to TikTok. Today, this part of the traffic has almost been moved. “For example, someone specially moved the pet account video on Douyin, and the contents of dozens of numbers were emptied. The largest account has 8 million fans, and they call it the “Great Voyage and Seashore Project”. This method produces TikTok’s 100,000 fans. Now you are using TikTok as a pet account, and there is basically no traffic.”

Virginia told Ran Finance that they currently operate more than 300 accounts and each account has to publish 50 videos per day to maintain stable traffic. For this reason, they have also studied many tools, including unmanned live broadcasts and other modes. But she said frankly that as TikTok’s risk control becomes more and more stringent, many shortcuts are no longer available. Therefore, now entering the venue, you must either make original videos, or have a special way to make videos, or it is extremely difficult to divide the traffic.

Many interviewees said that the “TikTok+ stand-alone station” model requires a good foundation for cross-border e-commerce, including how to acquire customers, community operations, brand marketing, etc. If the entire process is not professional, conversion cannot be achieved. Just like Lin Shengru said, the conversion path of independent stations is very long. If you can’t run through the model, it will be difficult to get a deal.

Nowadays, the TikTok store function has appeared, and the conversion rate can be greatly improved by realizing on-site transactions. However, as a short video social media, TikTok needs to continue to explore if it wants to cultivate an e-commerce environment.

Lin Sheng pointed out that the current TikTok user age group tends to be younger and the overall consumption level is not high. Therefore, the products sold are mainly low-priced and novelty. “Nowadays, low-priced products are used to attract traffic, and traffic is flooded. Low-end traffic. In addition, consumption habits have not yet formed, and many people don’t know that TikTok can shop. Next, small stores will be opened in more countries and the shopping cart model will be normalized. Only with soil can we sell high value. Products.” He pointed out that TikTok’s products are now priced below US$50, with US$10 products being the most popular.

Virginia described it more sharply, “The freight is more expensive than the product , and the total price of the freight plus the product cannot exceed $50. The reason is very simple. Now the Chinese have just begun to sell goods on it. If a product is unremarkable, it can be bought locally. , You are still selling very expensive, so why should foreigners buy your products and wait for 30 days to arrive by sea?”

According to Ampere’s latest data, in 2021Q1, young viewers are still TikTok’s largest user group, with one third ( 32% of users between 18 and 24 years old.

For domestic cross-border e-commerce sellers, a great obstacle to operating TikTok accounts is the network environment. Many interviewees have expressed similar experiences. In China, logging in to TikTok is more difficult than logging in to platforms such as Amazon. In addition to the need to set up a network line, you also need to purchase an overseas mobile phone card. Even if you log in successfully, you may be restricted due to equipment. Video “breaking zero” is a lot of entry. The hardest step for the winner.

Both Virginia and Levis said that sometimes a batch of accounts are operating well and the traffic is quite good, but due to network environment problems, they may be banned and have to be restarted, and the operating costs are high.

Of course, talents are also very important for operating TikTok accounts, especially in the face of the language and cultural environment of different countries. It is necessary to cater to the preferences of audiences in different regions to make videos with traffic. Virginia said, “Even if you are in the country, The music is very slippery, and TikTok may not be able to play it, let alone bring the goods.”

Of course, KING and a group of Chinese merchants are still very optimistic about TikTok. “It’s hard to break through the domestic Douyin now, and the barriers to entry are higher. The foreign market has just started. TikTok is now the TikTok two years ago. You can still do it. It’s a career.”

Global layout

In March, British real estate company Helical announced that TikTok’s UK headquarters company leased the office building Kaleidoscope for a 15-year lease. The building has an overall area of ​​88,500 square feet and is located in the City of London, that is, Google, Facebook, Linkedin and many other technology giants. location. Accordingly, TikTok may move its headquarters from the United States to the United Kingdom.

TikTok's Chinese merchants are quiet

Source of TikTok London Headquarters “Kaleidoscope” / PLP architecture

Beginning in the second half of 2020, TikTok has begun to open up the market, and the pace of commercialization has accelerated. Yibang Power reported that in October 2020, TikTok announced a partnership with Shopify, an independent SaaS service platform. First, Shopify American merchants can connect with TikTok, and they can create and operate TikTok short video shopping ads directly on the Shopify platform. In late February this year, the two parties announced that they had expanded their cooperation to the United Kingdom and also planned to quickly cover European countries such as Germany, France, Italy, and Spain.

On December 18, 2020, TikTok also cooperated with Wal-Mart in the United States to live broadcast the goods. 10 TikTok creators performed on the same stage and introduced Wal-Mart’s fashion products. During the live broadcast, consumers can click on the products on the live page without leaving the APP Icon to place an order directly. In this regard, William White, the chief marketing officer of Walmart in the United States, publicly stated that TikTok has realized an innovative way of live shopping, which allows consumers to enjoy interesting content while buying favorite products faster. This new experience Bring more fun to consumers and create more possibilities for Wal-Mart.

Undoubtedly, this innovative live broadcast can be said to be the first attempt of TikTok’s small store functions in Indonesia and the UK this year. At present, TikTok’s European and American markets are more mature and revenue is better. Sensor Tower data shows that TikTok’s May revenue exceeded 95.7 million U.S. dollars (about 680 million yuan), which was 10.6 times that of last May. About 89% of its revenue came from Central Europe; followed by the United States and Turkey, contributing Revenue was 6.2% and 1.2%, respectively.

Several interviewees told Ran Caijing that the current commercialization atmosphere in the US market is stronger, and TikTok’s PC live broadcast function launched in May is also more active in the US market. As US President Biden lifted the Trump administration ‘s ban on social media applications TikTok and WeChat on June 9 , the US market may usher in better development.

It is worth mentioning that the cross-border e-commerce businesses of Alibaba and JD.com are also opening up markets on TikTok.

Ran Caijing found that Ali’s three cross-border e-commerce platforms Alibaba International Station, AliExpress (AliExpress), and Lazada have all registered accounts on TikTok. Alibaba International Station’s corporate account has 2 million followers, Lazada Indonesia Station, and the Philippines. station accounts were 2.5 million, 2.2 million fans, but also other accounts ranging from 1.5 million the number of 50,000 fans, the most amount of short video playback high up to 25 million times. The Lazada Indonesia site has directly opened the store function, and other accounts have APP download links or mall URLs on the homepages of other accounts.

TikTok's Chinese merchants are quiet

Source of TikTok account of Ali’s three major cross-border e-commerce platforms  / Screenshot of Ran Caijing

JD.com is no exception. Its TikTok corporate account now has 146,000 followers and has received 475,000 likes. Among them, two promotional videos of 618 this year have received 19.4 million and 18.8 million views respectively. Currently, the Indonesian store function has been opened, and the homepage has also been released. APP download link.

According to the “late LatePost” reported that from November 2020 to early May this year, the byte beat a day in advertising revenue overseas products increased from nearly $ 4 million (about 25.52 million yuan) to $ 9.0 million (about 57.42 million yuan ), which mainly comes from TikTok. Obviously, TikTok is developing rapidly, and with the realization of the closed loop of global e-commerce, its revenue will rise to a higher level.

Reference

“TikTok storm the UK market, shopping cart and when they hang on the live room? 》, Source, Yibang Power

* In the text, Lin Sheng, Levis, KING, potato chips, and Virginia are pseudonyms. 

*Disclaimer: In any case, the information or opinions expressed in this article do not constitute investment advice to anyone. 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/tiktoks-chinese-merchants-are-quiet/
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