TikTok calls in tech start-ups to help with ecommerce push
TikTok has called in tech start-ups to boost its ecommerce operations in a desperate attempt to diversify revenue streams.
According to initial reports from the Financial Times, TikTok’s parent firm Bytedance has been working with YunExpress as a logistics partner to get its social commerce offering off the ground on a more global scale.
It also works with Dutch ecommerce service Channel Engine to distribute order catalogues to TikTok Shop customers.
Social commerce is where users can buy and sell items within a social media app. McKinsey reckons the market is expected to grow to more than $2 trillion by 2025.
Whilst the trend has experienced huge success in China, it has struggled to rally as much momentum in Europe and the US.
Indeed, TikTok Shop, which launched last year in the UK and south-east Asia, has been met with a number of obstacles – including reports of staff burnout and a lack of sales.
According to reports from the FT, ByteDance, which owns both TikTok and Douyin, has outsourced some of its operations to boost the ecommerce arm.
It comes after reports that TikTok cut its global revenue targets for 2022 by at least 20 per cent in September after it struggled to keep up momentum in the face of tightening advertising spend and wider macroeconomic instability.
Head of investment at interactive investor Victoria Scholar previously told City A.M. that although Facebook has been at odds with TikTok to nab the attention of Gen Z, the latter’s “overconfidence has led to a spending problem that has got out of control”.
However, it’s not just TikTok that is betting on shopping. Alphabet-owned YouTube has reportedly been testing how influencers can sell products through the platform.
The firm plans to roll out two pilot shopping schemes next year, paying creators a commission on the products they sell via the channel.