One year after TikTok Shop entered the US, where is content e-commerce heading?

As TikTok Shop develops steadily in the US, it is gradually becoming a new engine for brands to go global. This article will analyze TikTok Shop's performance in the US market, explore how content e-commerce has become a new trend for brands to go global, and look forward to the new opportunities it may bring in the upcoming Black Friday promotion.

In the past six months, I have been traveling abroad intensively, not only to see how domestic brands perform overseas, but also to understand the real opinions of overseas consumers on domestic products.

An unavoidable fact is that a considerable number of overseas consumers buy Chinese products because they are cheap. This makes me realize that the "brand going global" campaign we have been shouting about for many years still has a long way to go.

Over the past 30 years, brands such as Huawei, Lenovo, and Haier have continuously expanded overseas markets, gradually breaking the stereotypes of Chinese manufacturing among global consumers. It was an era when we ventured into the world alone, and no one knew what kind of waters we were about to enter.

While these brands are heading overseas, the domestic business landscape is also undergoing tremendous changes.

After the initial explosion of e-commerce in 2003, it took only 10 years to break through 10 trillion yuan in transaction volume. Ten years ago, a large number of rural residents in China did not know what express delivery was. As of last year, China's express delivery business volume has exceeded 110 billion pieces, 5 times higher than the second-ranked United States, and couriers are almost everywhere.

The rise of e-commerce platforms has created countless business opportunities. With the expansion of e-commerce platforms overseas, countless merchants have the opportunity to go global. Platforms and merchants together form an ecosystem for brands to go overseas, evolving together during the long journey.

In the early days, domestic merchants made profits by distributing a large number of goods on e-commerce platforms. But now is not the era when you can catch big fish by casting a wide net. What we need is to learn how to "make bait". And content is the best bait. This is why I am optimistic about content e-commerce. Because it allows domestic merchants to sell more goods overseas, and also allows them to tell stories and build brands.

01 Use content to build a new foundation for brand expansion overseas

Unlike the first generation of brands going global, which faced desolation and uncertainty, today’s brands going global have neither a lack of companions nor a lack of leaders. The predecessors used their experience to draw a navigation chart, and the e-commerce platform built an ecological foundation for them. How to choose and make good use of this foundation is the key to brands going global in this era.

Why do I say that choosing a base is important? Let me tell you two stories.

I know two underwear merchants, both of whom are engaged in the US market. In terms of product and supply chain quality, the two are comparable. However, due to the different "bases" they chose, their fates are completely opposite.

Merchant A sold a large number of products on a cross-border e-commerce platform, but because there were too many products of the same type, he could only trade price for sales. As a result, the profit margin became smaller and smaller, and he had to sacrifice product quality. He did not make any money, and consumers did not enjoy good products and services. He almost ruined the reputation he had accumulated over the years.

Merchant B saw the intensified homogeneous competition in the industry and realized that he had to change his strategy to stand out. After going through multiple e-commerce platforms, he chose TikTok Shop, which has both shelf and content platforms. In 2020, he started with a traffic matrix account on the TikTok platform, and in 2023 he became one of the first merchants to enter the US store.

In the early stage, he used TikTok Shop's full-hosting model to quickly test new models with small orders, and then used short videos to quickly increase sales. Because the full-hosting model comprehensively covers store operations, marketing promotion, customer service, and logistics distribution, it allows him to focus on product research and development and supply chain optimization, and quickly adapt to market changes. Now, the annual sales of merchant B has exceeded US$200 million, 60% of which comes from the US market.

Similar starting points, different endings. These two stories not only tell us the importance of choosing a base for going overseas, but also reveal the shortcomings of current e-commerce platforms. The development of cross-border e-commerce over the past decade has been dominated by the shelf e-commerce model. But when brand going overseas becomes the mainstream trend, merchants need to find the next growth point after shelf e-commerce to help them build reputation, bring repeat purchases and long-term business growth.

Therefore, I believe that after the rapid development of e-commerce going global, there will inevitably be a period of "adjustment". After this period, the advantages of content e-commerce will be highlighted, and the ecological foundation and competitive landscape of going global will also be reshaped.

Compared with shelf e-commerce, content e-commerce can better demonstrate the differentiated advantages of products and prevent merchants from exchanging low prices for short-term sales growth, thereby creating higher gross profits.

In comparison, overseas content e-commerce is still a blue ocean. When influencers are accumulating fans in the early stage, they will pay special attention to the quality and reputation of their content. So now can be said to be the time when the trust between overseas influencers and users is the highest. At this time, the efficiency of bringing goods, including the establishment and dissemination of brand image, is the most favorable. At the same time, because influencers have a better understanding of user preferences and platform rules, they can also give suggestions to merchants on how to supply goods and promote new models.

Content e-commerce is also more conducive to brand management, allowing businesses to accumulate brand assets and achieve product and sales integration. I talked to a boss who makes curling irons, and he told me that he was operating TikTok Shop as an integrated marketing plan. This was something I didn't expect, and what surprised me even more was that before he opened the TikTok Shop, he printed TikTok's QR code on his offline posters and print ads. Now, they have become an Internet celebrity brand in the US market, and have also become the head of the beauty and personal care category in the US region of TikTok Shop. All the brand activities and communications they have done will be directed to TikTok Shop, and they will operate it as a long-term position for branding and sales.

In the boss's own words: "TikTok Shop is a content e-commerce, and conversion is only the last step. When the previous steps are done right, conversion will happen naturally."

02 In the 2.0 era of e-commerce going global, what matters is internal strength

As the requirements for new foundations for brands to go global evolve, the era of e-commerce going global 2.0 has arrived. The development of content e-commerce does not rely on explosive power, but on acceleration.

Compared with pure shelf e-commerce, content e-commerce may seem calm now, but it is actually accumulating energy. Once the accumulation is completed, it will usher in a huge market space. Therefore, I think the battle for e-commerce going overseas has just begun, and it is too early to make a judgment now. In the era of e-commerce going overseas 2.0, the competition is not about who runs faster, but who has more determination to cultivate internal strength.

Recently, I have observed that TikTok Shop is becoming the platform that is closest to the sample of the e-commerce overseas 2.0 era.

In the past year since its entry into the US, TikTok Shop has developed rapidly, but it has obviously not met the expectations of the outside world. There are objective factors behind this, such as time - TikTok Shop only officially entered the US in September last year. But more importantly, there is a difference in business model. In the past year, it has focused on cultivating internal strength and accumulating energy for an explosion.

What does TikTok Shop do?

The first is to find the right position and strengthen its own advantages. This year, TikTok Shop has increasingly clarified the concept of "content e-commerce". This is the only large-scale mainstream content e-commerce platform in the overseas market that I have seen so far.

TikTok Shop’s confidence in its focused positioning is also due to its outstanding growth performance in the content field.

Over the past year, the GMV of TikTok Shop content has soared by 557%, and the average daily live broadcast and short video playback volume have maintained a high growth rate. Overseas users are also becoming more and more receptive to content shopping, especially in the US, where the number of daily paying users has increased by more than 3 times. After investing in content e-commerce, TikTok Shop has grown into the TOP1-TOP3 GMV contribution channel for many merchants.

Take Merach, a fitness equipment brand I know, for example. This brand itself has become the top of major e-commerce platforms in China, and in 2020 it began to go overseas to seek broader business opportunities. Because the average customer spending on fitness equipment is relatively high, brand power is necessary to maintain gross profit. TikTok Shop did not disappoint him, and the average customer spending on its first hit product, the "Shaking Machine", was close to $100. In July this year, it also held a "marathon self-broadcast" in the US, with a GMV of nearly $100,000. Now, TikTok Shop has become one of Merach's largest overseas sales channels.

Thermos brand Meoky was also one of the first merchants to seize the opportunity. In 2023, Meoky's sales on the platform exceeded 100 million yuan, and last year's Black Friday promotion had monthly sales of over 150,000 orders, making it the GMV champion of the kitchenware category in the US region of TikTok Shop that season.

Such impressive results are inseparable from the in-depth operation of the content field. The person in charge of Meoky's TikTok Shop channel told me that the traffic brought by influencer marketing, self-broadcasting and self-made short videos has accounted for 70% of the store traffic, of which influencer marketing accounts for 50%.

Therefore, they now attach great importance to the operation of TikTok Shop influencers, using emails, social platforms and other methods to find influencers, and provide enough sincerity and benefits to leverage cooperation. Now they have cooperated with more than 4,000 influencers. They will also customize popular products according to the preferences of influencers, which is a very useful method. Compared with the wide-ranging distribution, in-depth operation of a few popular products is more efficient and has better brand recognition.

While merchants are deepening their presence in the content field, TikTok Shop has also been accelerating the construction of its content e-commerce platform over the past year.

For example, in order to allow self-operated merchants to start up accounts and increase their volume in the US more quickly, TikTok Shop has spent a lot of time optimizing the operation of the content field and formed an identification system that is more friendly to domestic merchants. At the same time, through the E-commerce University, it has launched content operation training for merchants, as well as training content on transnational rules and regulations such as IPI, prohibitions and restrictions on sales, and intellectual property rights. Tikok Shop even directly matches domestic self-operated merchants and leads domestic self-operated merchants to meet directly with top local influencers in the United States. Under the general trend of brands going overseas, domestic top MCNs are also actively going to the US. Domestic top institutions such as Wuyou, Yaowang, and Taiyang Chuanhe are widely taking on the needs of self-operated merchants, providing one-stop services from broadcasting to store operations, thereby promoting the prosperity of the TikTok Shop influencer ecosystem.

In this way, after a year of "internal training", it can be said that TikTok Shop has created a basic form of an American sample.

03 Using the American model to start comprehensive acceleration

As a global retail highland, the importance of the US sample is self-evident. Before the launch of TikTok Shop, major e-commerce platforms had already been competing fiercely here - Amazon, Walmart, and eBay have deep roots in the local market, and Shein and Temu have taken advantage of the first-mover advantage and are growing rapidly. TikTok has 1 billion monthly active users worldwide, 170 million of which are in the US. Building a US sample is of great strategic significance to its e-commerce layout in the global market.

But the US market is a tough nut to crack. Live shopping has not yet become a mainstream consumer habit here, and the high labor costs are an obstacle for local anchors to continue working at a high intensity. If they are domestic anchors, it is difficult to adapt to the content needs of American users.

However, this did not stop TikTok Shop from taking over the US market. The US anchor and content ecosystem is also gradually improving under the general trend of brands going overseas. As of August this year, the number of TikTok Shop's overall content e-commerce creators has increased by more than 10 times year-on-year, and the number of sales influencers has increased by more than 70% each quarter.

As for the live shopping habits of users, I think it is a relatively easy problem to solve. Chinese users are not born to like live shopping, and our shopping habits have also gone through a process of cultivation from scratch. TikTok has 170 million monthly active users in the United States as a foundation, and Europe and the United States have long been influenced by TV shopping, so it is only a matter of time before the habit is formed.

Over the past year, TikTok Shop has worked with merchants to explore localization paths in the U.S. market. Whether it is a self-operated model or a fully managed model, they have successfully created samples such as Pop Mart and LovelyWholesale swimwear.

During this year's mid-year promotion, Pop Mart became the first cross-border brand to have a live broadcast room with a value of $100,000. Under the TikTok Shop self-operation model, it achieved rapid business growth by participating in platform promotions, developing self-made content, and building a professional team.

Pop Mart entered TikTok Shop in the fourth quarter of 2023. From the very beginning, it attached great importance to the construction of brand-made content. Starting from the cold start of self-broadcast content, the brand's self-broadcast was launched steadily every day. In order to better accumulate traffic, Pop Mart will set up small games in the live broadcast room, actively respond to comments, and strengthen interaction with consumers in the US. By the second quarter of this year, Pop Mart has been able to stably broadcast live for about 14 hours a day. At the end of June, Pop Mart's single live broadcast GMV exceeded a new peak of 75,000.

Daily accumulation is the premise for the big promotion. During the mid-year promotion, Pop Mart launched two new products in the live broadcast room of TikTok Shop. In order to provide fans in the live broadcast room with their favorite products in a timely manner, Pop Mart flexibly adjusted the products on the shelves of the live broadcast room according to the data performance of each live broadcast. On the last day of the promotion, Pop Mart won 100,000 GMV with an 8-hour live broadcast. The single-game click rate of the TOP1 single product "Mega Molly400%" was as high as 35%, and it was sold out immediately after it was put on the shelves.

Another example, the swimsuit brand LovelyWholesale (hereinafter referred to as "LW"), achieved daily sales of a single product exceeding 1,000 pieces through the TikTok Shop fully hosted model, with sales increasing by 1,158% month-on-month, becoming a dark horse in the industry.

Because the platform is responsible for all operations except stocking and product development, LW's cold start pressure is reduced to the greatest extent. In the early stage, with the help of the platform, the store completed the cold start of the product through the operation of shelf scenes such as mall recommendations, searches, channel activities, and accumulated a certain amount of positive user reviews. Subsequently, the platform continued to help LW with content field operations, in-depth analysis of market data, accurate positioning of trending products, and rapid production of high-quality and highly attractive short video materials.

In the highly homogenized swimwear industry, it is difficult to break through without brand potential. LW uses the display function of the live broadcast room to let anchors wear swimwear to explain the details of fabric texture and pattern design to consumers. Through the anchors' vivid and sincere sharing, users in front of the screen can empathize. With the help of the platform and its own continuous investment in the content field, the daily sales of swimwear in LW store have successfully exceeded 1,200 orders.

As the TikTok Shop e-commerce ecosystem becomes more and more complete, I believe there will be more and more such samples. When the number of samples is large enough, the platform will explode completely.

04 Conclusion

Looking back at the year that TikTok Shop has been in the US, we can see that it is not just pursuing high growth rates. In this impetuous business environment, being able to endure loneliness and keep calm is a very valuable quality.

TikTok shop insists on positioning itself as a content e-commerce platform, which can be said to be an unprecedented path overseas. When a platform is trying to explore new models of e-commerce going overseas, it means that it is not satisfied with the short-term benefits at hand, and has the opportunity to promote the brand overseas ecosystem and enter the next era.

TikTok Shop will prepare for the upcoming Black Friday promotion with a new content e-commerce model. It is ambitious to launch more than 5 billion off-site exposures, double the content recommendation traffic and other major benefits of the year. This is the second Black Friday after TikTok Shop entered the US area, and it is also a test of its content cultivation results. I look forward to it bringing surprises to the industry.

E-commerce going global has entered the 2.0 stage, and content e-commerce is the core differentiation advantage. I think the ultimate goal of brands going global is to achieve better business growth. No merchant wants to make a series of operations in exchange for lower profits and high fines. Taking content e-commerce as the foundation for brand going global shows that the industry is iterating from the early barbaric growth model. The newly emerging platforms are consciously helping domestic merchants achieve long-term development overseas and establish a positive brand image.

The battle for cross-border e-commerce has just begun.

Editor: Jasmine
Editor-in-Chief: Shen Shuaibo