TikTok, which has forcefully entered the e-commerce field as a social media giant and expanded rapidly in countries around the world, has revealed its ambitions to the world this time.
Recently, TikTok has set a goal for its e-commerce business: to achieve a GMV (gross merchandise volume) of US$50 billion in 2024. Compared with this year’s target of 23 billion, this number has more than doubled.
Objectively speaking, this is not an impossible goal for TikTok.
Currently, in Southeast Asia, TikTok Shop’s GMV has exceeded US$13 billion, of which Indonesia alone accounts for more than 30% of the market share. Although the setback in the Indonesian market in the past two months caused it to lose approximately US$1 billion, TikTok Shop has regrouped and has returned to the market through cooperation with Indonesian local e-commerce platform Tokopedia, and has joined the Double 12 promotion with high profile arena.
So next year, TikTok Shop’s e-commerce journey in Southeast Asia may be smoother, and its GMV should also be able to achieve stable growth.
In the United States, TikTok Shop’s daily GMV is now US$14 million, a surge of more than 40 times compared to May this year. During certain major promotions, such as Black Friday, its single-day GMV can even exceed US$30 million. If this growth momentum continues, next year, TikTok Shop’s single-day GMV in the US may reach US$100-200 million. This market alone will contribute more than US$30 billion in GMV for the whole year.
Obviously, these outstanding results are the basis for TikTok Shop to set a GMV target of US$50 billion.
Make up for the shortcomings of e-commerce
In fact, in order to pursue long-term development, TikTok Shop is now looking for ways to make up for its shortcomings.
The first is the logistics issue. As an emerging e-commerce platform, the construction of TikTok Shop’s logistics infrastructure will inevitably fail to keep up with its expansion speed. For example, in the United States, due to the failure to establish the platform’s own logistics and distribution network, TikTok Shop can only cooperate with third-party express companies, which has brought about problems such as cumbersome delivery processes, vulnerability to buyer complaints, and after-sales difficulties.
In order to make up for the shortcomings of logistics, TikTok Shop is developing its own logistics services in the United States. In the UK, at the end of November this year, TikTok Shop also reached a cooperation with the Royal Mail to integrate Royal Mail’s shipping solutions into TikTok Shop. In addition, they will also conduct more in-depth cooperation in data analysis, logistics technology and e-commerce operations, and launch a new international express service to improve the efficiency of logistics transportation and the quality of logistics services.
Secondly, there is the issue of product quality. Currently, most of the products on TikTok Shop are white-brand products. They are low-priced and can help TikTok Shop open up the sinking market. However, their quality is often not well guaranteed, and there are even many fakes mixed in. In markets such as the UK and Vietnam, TikTok Shop has been criticized by consumers for this problem.
In order to make up for this shortcoming, TikTok Shop is determined to make changes. “Users in European and American countries have very high requirements for product quality, after-sales policies, and customer service,” said Kang Zeyu, head of TikTok’s e-commerce business. “We have to invest a lot of energy in exploring and making breakthroughs.”
Therefore, TikTok Shop is working hard to attract more brand merchants with guaranteed product quality. Recently, ZARA, the world-renowned fast fashion brand giant, officially entered TikTok Shop, bringing it more potential loyal user groups.
In general, TikTok Shop’s various efforts to make up for its shortcomings will not only promote further growth in its performance, but also provide reference significance for sellers. This reminds sellers that it is very necessary to provide good user service and improve product quality.
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