TikTok’s Plan to Dominate Social Commerce

August 9th, 2023 by

TikTok’s social commerce push has been in the news frequently as of recent, and the latest update is that the platform hopes to close out 2023 with a whopping $20 billion in retail sales—a 300% increase, from just under $5 billion in sales last year. 

But how does TikTok plan to accomplish this massive increase?

TikTok’s plan to become a shopping powerhouse

TikTok’s latest plan to increase its social commerce sales is by building the TikTok Shop Shopping Center. The Shopping Center will sell the stereotypical clothing and goods you can find in potentially questionable online stores such as Shein or Alibaba. 

The TikTok Shop Shopping Center is planned to function in a similar way to Amazon’s Sold by Amazon programme. TikTok will source third-party products, and handle the sales, shipping and logistics itself. 

The Shopping Center is a part two to TikTok’s previously announced plans to build fulfilment centres in the US. TikTok’s fulfilment centres will provide warehousing, delivery, and returns for TikTok merchants to ensure fast and sustainable growth of TikTok Shop. 

Despite growing relatively slowly within the US, TikTok Shop has boomed in the UK, and its popularity is slowly seeping into the States. The implementation of fulfilment centres in the US will reduce the wariness the government and some users have about data storage—we’re referencing the recent ban threats following misinformation that US data was stored in China. 

TikTok Shop shopping Center

The fulfilment centres will also give smaller businesses an advantage over larger competitors. Rather than having to invest in a website and their own warehouse and logistics, small businesses can focus on growing their TikTok presence and rely on the platform’s logistics offering. 

One of TikTok’s top priorities is to empower local businesses to build their presences on the platform and within the TikTok Shop Shopping Center. 

The Shopping Center will integrate multiple channels that users can view and buy goods from, all in one singular location. Shoppers will be able to purchase from third-party merchants, as well as TikTok-produced items. 

TikTok is a well-known destination for promoting the best dupes. With the development of the Shopping Center, it’s likely that TikTok will begin developing its own dupes of products prominent under the #TikTokMadeMeBuyIt hashtag. 

TikTok has been testing a variety of new locations for TikTok Shop recently. Its latest test saw the Shop replace the swipeable Friends tab on the home page—meaning users would simply have to swipe to the left to visit TikTok Shop’s landing page. 

The TikTok Shop Shopping Center however, will be a one-tap-shop to a shopping portal. In addition to viewing the available products, shoppers will be able to view orders, access their shopping cart, set their addresses and payment methods, and chat with merchants. 

The Shopping Center is set out very similarly to a general online store, with products split between categories for easy discovery—including beauty, women’s clothing, electronics, food, and more. To make the experience more personal, the Shopping Center will show users products on their homepage that relate to their activity on the platform, as well as offering flash sales and exclusive TikTok Shop discounts at the top of the page. 

Due to the recent popularity, and continued growth of customers, of TikTok Shop, the Shopping Center is a natural progression of TikTok’s commerce efforts. By focusing on making the TikTok Shop consumer journey easier and more relevant to each user, TikTok is encouraging users to actively consider the platform as a shopping destination, putting it miles ahead of other social platforms starting out their social commerce journeys.

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@ Socially Powerful

Posted in Industry Trends, Marketing News, Social Commerce, Social Media Platforms