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Text｜Zhang Ziyi

Editor: Yuan Silai

The “Four Little Dragons Going Global” have been competing closely with each other until now, and their demands for GMV growth targets are consistent, but the differences between them are becoming increasingly clear.

TikTok is targeting live streaming e-commerce, leveraging the characteristics of its short video platform to vigorously develop its interest-based e-commerce features. It is vigorously promoting its benchmark cases of live streaming e-commerce in the UK and the US, and implementing various new policies aimed at encouraging platform sellers to develop live streaming e-commerce.

Not long ago, foreign media reported that TikTok Shop plans to increase the basic commission fee for sellers in the UK from 5% to 9%. The change will take effect on September 2. It is understood that this adjustment is part of TikTok Shop's focus on developing live e-commerce and shoppable content to create a "future market."

To this end, TikTok Shop has launched a "seller mission" program, which allows UK sellers to reduce their commissions if they can create "a certain number of TikTok live broadcasts or videos with goods." As part of the program, sellers can work with TikTok creators to help them create corresponding videos, and TikTok Shop added that "the incentives are designed to encourage sellers to expand their audience through live broadcasts and videos with goods."

TikTok Shop's seller fees have remained largely unchanged since the creation of the UK market in 2021. In addition, TikTok plans to launch a co-funded delivery model on September 4, providing free delivery services by allowing sellers to share part of the costs, thereby increasing order conversion rates.

Many signs indicate that TikTok has never changed its determination to engage in live e-commerce overseas. Compared with the stumbling blocks and cultural frictions in the early stages, since 2023, TikTok's "play style" in live e-commerce has become more meticulous, cautious and targeted.

01 Creating a “wealth-making myth”

At the end of June, British beauty brand Mitchell Halliday participated in the TikTok Shop (UK) summer promotion and held a 12-hour live broadcast event. Founder Halliday sold one cosmetic product per second, generating revenue of $830,000. The brand then exceeded $1 million in sales within 24 hours.

A month later, beauty brand P.Louise broke the record again by achieving sales of over $2 million in 12 hours on TikTok Shop (UK).

The US market is similar. Jeffreestar, a top US influencer, made $665,000 in a single live broadcast on TikTok in the US region in late May. It mainly sells beauty products such as beauty and skin care.

At the same time as the myth of celebrities making money emerged, Tik Tok’s official support policies were introduced one after another.

TikTok has taken some detours in live streaming e-commerce. The UK is one of the earliest markets where TikTok Shop was launched, and its development has been quite unsuccessful in the past two years. In 2022, many British bloggers withdrew from the live streaming cooperation with TikTok because the market was immature, resulting in low and unstable live streaming income, and many sellers were indirectly affected and withdrew.

But in early July this year, TikTok Shop in the UK launched a support program aimed at helping new merchants achieve £1 million in revenue on the platform.

Specifically, the incentives offered by the "£1 million club" include 90 days of 0% commission-free sales and priority seller support services. TikTok Shop will also provide merchants with dedicated promotional support to help increase brand exposure. Sellers can also learn about market trends and operational skills by participating in the seller academy provided by TikTok Shop.

The United States can also see the official support. In early June, TikTok Shop announced the launch of the "100 million yuan club" plan, which aims to help American cross-border merchants achieve a leap in GMV through a series of incentives and resource support, aiming directly at the 100 million US dollar mark. The plan includes supportive policies such as commission reduction and exemption, logistics services, etc.

The first live broadcast room in the US region of TikTok to exceed one million US dollars in a single day appeared in June, and the influencer @iamstormisteele achieved sales of 1.02 million US dollars.

Data from third-party data platform Tabcut showed that before this, the sales data of iamstormisteele’s first three live broadcasts did not even exceed 10,000 US dollars.

The same story has already been played out in domestic e-commerce live broadcast rooms. With the help of Douyin, big anchors have created the myth of over 100 million sales. Luo Yonghao made his first live broadcast on Douyin in 2020 and achieved sales of 110 million yuan.

The European and American e-commerce markets are completely different from the domestic ones. Live streaming is a new thing, which also means that e-commerce platforms must spend a lot of effort to build a good infrastructure, including cultivating influencers, platform streaming support, overseas logistics and sourcing.

The degree of acceptance of live streaming e-commerce by European and American users remains to be seen, and it also takes a lot of time to cultivate and discover celebrities who do live streaming.

At least in the Southeast Asian market, a TikTok seller told Hard Krypton: "The Southeast Asian influencers are still not good enough in live streaming and selling goods. They are not very good at describing the products, and the effect is very average. We plan to write scripts for them in the future and teach them little by little."

02 Widening the moat

TikTok is somewhat anxious about the progress of its e-commerce business.

Bloomberg reported that TikTok expects its U.S. business sales to grow 10-fold to $17.5 billion in 2024. However, Tabcut shows that from January to May 2024, TikTok's full closed-loop GMV in the U.S. was less than $2 billion. The performance growth is not optimistic.

36Kr has reported that TikTok's GMV target in the U.S. in the second half of the year is US$12-13 billion, of which Global Selling (commonly known as "cross-border") business contributes about one-fifth.

TikTok is also constantly adjusting its US investment policy in China.

The latest standard is that starting from August 16, 2024, TikTok Shop in the US will launch a "store deposit" policy for cross-border self-operated merchants, and each store will be charged a deposit of US$500. If multiple stores are opened under the name of the same merchant, a deposit must be paid for each store separately.

A $500 deposit is actually not a high requirement for merchants, and it is helpful in regulating merchants’ store opening.

In June, TikTok significantly lowered its entry threshold. Take the Amazon partner store as an example. At the end of last year, the store required merchants to have an annual sales volume of more than $2 million on Amazon and at least one product listed within Amazon's top 100,000. After the ban, merchants can enter as long as they have a total platform sales volume of more than $2 million. By June, the $2 million sales threshold was directly cancelled.

In addition to vigorously attracting domestic merchants, TikTok has also strengthened cooperation with brands overseas to enhance its appeal. Retailers including Asos, Zara, THG's LookFantastic and even WHSmith in the UK have signed up for TikTok Shop. American beauty brands Elf Beauty and CosRx have also joined TikTok Shop.

Not only that, TikTok Shop even launched second-hand luxury goods in the UK. Many foreign media reported that TikTok introduced British brands so that consumers can buy second-hand luxury goods on its APP.

Second-hand luxury goods have grown rapidly overseas in recent years. TechCrunch believes that global sales of second-hand designer goods are expected to reach US$49.3 billion (45 billion euros) in 2023. The launch of the second-hand luxury goods category by TikTok Shop is a strategic move to enter the growing second-hand luxury goods market.

TikTok has been operating live e-commerce businesses overseas for more than four years, and has found some ways to "copy" the domestic market through trial and error. From a global perspective, TikTok has tried local lifestyle businesses in the Southeast Asian market, where live e-commerce has been developed for a long time, and has implemented the "million live broadcast rooms" plan in the UK and the US, focusing on infrastructure construction, and temporarily suspending the expansion of e-commerce business in other European markets.

However, the popularity of live streaming e-commerce in China is due to the right time, right place and right people. Live streaming has been developing in China for many years, and MCN agencies have been deeply involved in China for many years, and are familiar with discovering and cultivating celebrities. China's e-commerce environment has always been ahead of the times, and the frequent birth of billion-dollar live streaming rooms by big anchors is due to the special background of the epidemic. All of these are not available in overseas markets at present, and TikTok will definitely take a long time to cultivate.