News Analysis
The Gist
- Embrace channels. Consumers expect brands to follow suit with TikTok's ecommerce model.
- Disrupt middlemen. TikTok's model could lead to less reliance on traditional distribution.
- Future foreshadowed. Social ordering has become a reality, reshaping future commerce.
There are quite a few things in this world that never fail to surprise me. Take, for instance, the news about Elon Musk purchasing Twitter and transforming it into X, along with the unexpected move of promoting a dog-branded cryptocurrency using a picture of his dog — that was quite the shocker.
Equally surprising to me is that the United States was able to harness the power of science to develop an atomic bomb. These events definitely left me in awe.
However, if there's one thing that hasn't caught me off guard, it's TikTok's ecommerce launch. With its massive user base and influence on popular culture, it was only a matter of time before TikTok decided to take the plunge into the ecommerce game.
In fact, not to toot my own horn — but I predicted this back in 2021 in my CMSWire piece TikTok Is a Dormant Commerce Volcano Waiting to Erupt.
Now, I’m not here to say “I told you so” — but I am here to explain why this is actually something brands need to digest and account for moving forward. As we all are aware, TikTok — the Chinese social media goliath — has cornered the social media space over the last few years and has put other social media platforms in a choke hold. With an estimated 834 million monthly users worldwide in 2023, TikTok has captured 10% of the world's Internet users, and will continue to grow.
At this point, you might be asking — so what? It’s just a social media platform — my brand doesn’t sell through this channel, what’s in it for me?
Well, a lot.
Here are three reasons why you should be paying attention to TikTok’s ecommerce plunge into the world via its social media platform.
TikTok Ecommerce on 'Channel of Choice'
There’s one thing marketers and brands can’t overlook: the power of channel choice. Consumers' attention spans have been shortened. We can now fast forward and swipe over content we don’t like. This choice also extends into channels.
As social media has captivated our attention over recent years, it’s easy to see why consumers would be open to purchasing through this channel. Have a favorite TikToker you follow? Want to buy the hat he is wearing in his latest video? Easy, click here to purchase. See a review of a five-star Caribbean resort by a TikToker and want to visit? Easy, book your trip here.
We all have power in choice when it comes to what channels we digest content from — as brands look to continue their connection with their customers, embracing these channels and being open to selling products on them is essential. As consumers adopt new behaviors and become accustomed to ordering through social sites offerings such as TikTok ecommerce — they soon will expect your brand to follow suit.
Related Article: How TikTok Is Changing the Digital Marketing Game
Peace out, Middleman!
This is a scary day for distributors and middle men within the distribution chain. TikTok ecommerce aims to compete with the already established Shein and Temu — Chinese brands that allow US consumers to order directly from sources in China, removing the need for retail store fronts or distribution channels.
Why does this matter to your brand? As the US economy continues to find its footing, consumers will continue to seek alternative sources for products they need with cash-strapped wallets. This could cut into your revenue and customer loyalty streams.
So, how do you combat this? Looking to double down on marketing and promotional opportunities is a solid start. However, embracing inventory, product transparency and fast shipping options via ecommerce channels is likely the best approach. These Chinese retail marketplaces will have long delivery lead times and won’t be able to compete with your domestic shipping options.
Related Article: What You Need to Know About Marketing on TikTok
TikTok Ecommerce Launch Foreshadows Future Commerce
The biggest takeaway from TikTok’s entrance into the commerce arena is that social ordering is not just a theory, it’s become a reality. Content and commerce has always been the cornerstone of what successful online ordering looks like. Now it’s here.
Brands will need to embrace these social channels, influencers and product sponsored videos, without hesitation. Again, being in the channel your customer is in and offering them products that they want based upon videos and content they engage with is the secret sauce of successful ecommerce. It’s true, it’s authentic, it’s relatable and it’s genuine.
The future of digital commerce will have large stake in social channels. As a brand, you must start to invest and experiment within this channel; your customers are already at the party, and you’re showing up a few minutes late.
Now, I don’t want this article to have a "doom and gloom" feel to it, so let me reframe things a bit. There are many consumer-facing brands that really don’t have much to worry about, yet. If your brand holds weight with consumers and resonates with them emotionally, these Chinese channels won’t be able to compete.
If you have read my previous articles, you know I typically like to close with a quote from someone of historical relevance. It’s sort of my "word-slinging calling card," if you will.
Today, I’m sidestepping the historical relevant person and quoting myself. I once said, “Disruption breeds customer experience opportunities...” Last year I wrote a piece on cheap beer and recessions, and how even though disruption can cause customer experience havoc, it also presents an opportunity for brands to grow and pivot in a positive way.
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The same applies to what’s happening here with TikTok and ecommerce. Sure, it’s new and unknown — but I can guarantee you that it will breed new opportunities for you to better serve your customers in the channel they most desire, which at the end of the day is the goal, right?
As Elon Musk has said — “The future is going to be weird.” Sure, selling on TikTok might seem weird, but so is empowering a dog crypto currency. What was once weird can become mainstream news — and that’s a story worth reading with a cheap beer in hand.
