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TikTok to Expand eCommerce Options with New Distribution Deals

TikTok’s trying out a new way to stimulate its users interest in its in-app shopping options by offering a range of retailers free listings, free shipping, and zero commission on sales over a certain period as part of its latest effort to build on the commerce potential of the app.

As reported by Bloomberg, TikTok is hoping that it will be able to gain more businesses with this new offer, which could see a range of cheap products displayed in user feeds.

As per Bloomberg:

“[The] video service has begun pitching itself as a cost-free marketplace in a series of seminars and meetings with Chinese manufacturers and exporters. It’s dangling free listings, shipping, zero commissions and even warehousing to all comers: a tactic likely to disrupt a market now dominated by fellow Chinese-owned rivals Temu and Shein, and potentially undercut even Amazon.”

Leading a new charge on Western consumers are Temu and Shein, as they look to aggressively expand into new markets by offering not-profitable deals on a range of items as a means to get bargain-hunting internet and app users.

If we consider the current state of the economy, we are all looking for a good bargain. And with access to a huge catalogue of assorted items, both retailers are hoping that this new push will help introduce them into these new markets, and make them a known source for eCommerce moving forward.

TikTok has been looking to get into this space for some time.

In October 2022, reports suggested that TikTok was looking to establish its own fulfilment centres in Seattle and Los Angeles, as a means to directly supply products sold in its app, while more recently, some UK users claim to have been seeing a new ‘Trendy Beat’ shopping section in-stream, which displays products distributed by TikTok itself.

The strategy is that by fulfilling its own product orders through cheap prices and streamlined shipping, it will help to make users more aligned with its in-app shopping elements, which would then allow TikTok to expand its product listings to third parties, essentially kick-starting this element.

Positioning itself as a middle player between other Chinese retailers could be another way to expand on its direct product offerings, which would essentially enable TikTok to offer many more products that can be delivered faster through these agreements, making it a more desirable product discovery and purchase destination. TikTok really wants to make this happen.

But despite several efforts, TikTok’s in-stream commerce push has failed to gain attention in Western markets thus far, even as it’s become the key income stream in the Chinese version of the app. TikTok is seeing broader commerce acceptance in some Asian markets, including Singapore, Malaysia, and Indonesia. But Western users still seem largely hesitant to combine their social media and shopping experiences, preferring either physical shopping or using dedicated apps.

We hope that this new strategy will change that

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