In the first half of the year, TikTok faced strict scrutiny and information security concerns in North America. However, in September, it managed to open the "golden box" of TikTok Shop in North America without much difficulty, bringing new incremental opportunities to the cross-border e-commerce track. Meanwhile, the Southeast Asian market quickly rebounded after a brief slowdown, while the Middle East and the UK markets continued to show steady growth.
Looking back at the past 360 days in the TikTok e-commerce arena: there were ups and downs, but overall, it was a relatively smooth journey, and sellers, creators, and advertisers who were part of it all benefited from it.
With the dual impetus from the S-tier markets of North America and Southeast Asia, TikTok, combining social and e-commerce with its massive traffic and capital influx, is gradually shaping the global market landscape. The trend of short video e-commerce is sweeping the world, and more and more people are becoming aware of an app originating from China - TikTok.
Next, we will provide a "year in review" of TikTok for 2023. By summarizing the business highlights of TikTok Shop's "expansion year," we will explore the earning methods and wealth secrets of the shops and brands that generated millions in GMV in 2023, providing business insights for sellers in 2024.
Regarding the fierce competition in the overseas content commerce market over the past two years, the author believes that the development of TikTok e-commerce is primarily characterized by information disparity in product selection, followed by content-driven strategies.
However, the entire market is currently in a relatively chaotic state. Some businesses have mastered content-driven strategies, while others have not. They rely on their past success on Amazon to continue their presence on the TikTok battlefield. The proven methodology of success is unquestionably good. Still, at this point, if there are third-party data analysis platforms that offer even more advantageous content and information disparities, wouldn't that be icing on the cake?
The founder of TikTok, Zhang Yiming, once stated that the product logic that made TikTok successful was: "Full-screen high-definition + catchy music + special effects filters + personalized recommendation algorithms." TikTok's success in the overseas market is closely related to these four points.
Personalized recommendation algorithms align with user browsing preferences, a rich and diverse content ecosystem enhances user retention, catchy music boosts content dissemination, and, ultimately, viral content is created. From the viral "watermelon slice" filters that trended on the internet in the past two years to the current TikTok transformation challenge videos, it's evident that this viral logic transcends borders and TikTok's growing popularity is also attributed to these four key elements.
When it comes to TikTok e-commerce and product promotion videos, according to data monitoring by the Superstore Platform, videos with excellent sales performance often have over 200 million views. Video tags and topic rankings are updated frequently, and traffic trends change rapidly. Sellers and creators need to capture real-time traffic opportunities and efficiently produce suitable short videos to attract consumers. Creativity is also becoming more refined and niche-specific while adapting to local trends and innovation.
Due to the opening of local stores in the United States, the American market has witnessed the 'expansion year' of TikTok Shop, with record-breaking sales, revenue, and the number of new store openings since TikTok Shop was launched.
The model of short video e-commerce may be relatively unfamiliar to overseas users, but for our own sellers, it's no longer a novelty. Everyone can easily transplant proven popular content models from China to overseas markets, turning them into new business growth points.
In fact, since 2021, TikTok has actively encouraged its e-commerce sellers to expand their overseas business. During the expansion phase of TikTok Shop, there have already been well-established suppliers, and everyone has been eagerly awaiting this opportunity.
Despite the platform's ups and downs, some sellers chose to exit during the waiting period for 'compliant onboarding.' However, in the second half of 2023, TikTok's rapid growth in the U.S. market attracted more domestic sellers from Douyin (TikTok's counterpart in China), Southeast Asian TikTok sellers going global, and sellers from other international platforms. As soon as the policy opened up, sellers who entered during the dividend period, leveraging their experience in running content e-commerce on Douyin domestically, saw a substantial increase in their income.
Some sellers have also revealed to us that the growth of entering sellers has been too rapid, and the sunk costs have increased. Product promotion and marketing can no longer solely rely on buying user traffic for 'set and forget' results, and the effectiveness of buying user traffic is not as noticeable as before. By 2024, new sellers aiming to strike gold in the U.S. market will also need to carefully plan their business strategies.
In order to stabilize businesses and attract potential consumers, TikTok continues to roll out new e-commerce strategies and operational tools to support sellers and brands on the platform. For example, adjustments to security deposits in the Southeast Asian region, the launch of the Southeast Asian Mall, and the introduction of the fully managed 'one-stop shop' model demonstrate the platform's capabilities. Additionally, TikTok successfully brought the Indonesian TikTok Shop back online in just two months at the end of 2023.
With the growing user base on TikTok, it is expected that TikTok will continue to strengthen its e-commerce capabilities, bridging the gap between content traffic and monetization for content e-commerce. This will further establish TikTok Shop as a crucial platform for content commerce.
In a global society characterized by the atomization of interpersonal relationships, people increasingly rely on serendipitous connections among strangers, a trend that is epitomized in the online world. TikTok's algorithm is based on a 'content profile' rather than a 'social profile,' prioritizing individual user browsing preferences over small-scale social resonance. This aligns with the current expectations of mainstream users for social applications, making the transformation of TikTok into a content-driven e-commerce platform almost inevitable.
Drawing from the successful experience of its domestic counterpart, the 'Douyin' app, TikTok has smoothly adopted the monetization chain of short videos to create brand IPs: brand cultivation, self-owned traffic pool, and traffic conversion into sales. In 2023, with the enhancement of the platform's e-commerce functionalities, TikTok's content commerce capabilities have gradually matured, driving the emergence of 'content commerce' as a new trend in the e-commerce industry.
Apart from the maturation of content commerce, TikTok has become a hotbed for online trends and a preferred platform for highly sensitive trend-following demographics abroad. It has become a sought-after platform for collaborations between influencers and brands. Creators use TikTok to share their lives or showcase their talents, accumulating a large number of followers and fans, and providing powerful channels for the promotion and marketing of various brands and products.
At the same time, TikTok actively promotes the development of the influencer economy by launching various partnership programs and revenue-sharing arrangements, providing influencers with more monetization opportunities. TikTok's rise has injected new vitality and opportunities into the influencer economy. However, there are some differences compared to the situation in China. Firstly, due to strict privacy protections, obtaining influencer information and collaboration methods is not straightforward for individual businesses in regions like the United States. Secondly, the monetization of influencers is still in its early stages in overseas markets, especially when it comes to live streaming. The ability of the influencer economy and content commerce to complement each other remains to be seen in the context of the overseas influencer economy.
In 2023, it wasn't just domestic sellers who were enthusiastic about going global, but domestic influencers as well. Figures like Luo Yonghao, Yu Minhong, and most recently, 'Crazy Little Yang Brother,' among others, have capitalized on the current gap in the development stages of the influencer economy and e-commerce both domestically and internationally. These top influencers, with their accumulated experience in the domestic market, are confidently venturing into international markets. As top bloggers venture overseas one after another, whether they can 'stir up a storm' and develop a viable operating SOP (Standard Operating Procedure) for brands, domestic influencers, and even small and medium-sized sellers remains to be seen in 2024."
It appears that influencers and top influencers from China are exploring opportunities abroad, leveraging their experience to potentially create new strategies and best practices for international markets in 2024.
1. Brands and merchants should closely follow TikTok's content trends. Nowadays, content creativity and quality are crucial, and resources should be invested in creating attractive and shareable content rather than blindly buying user traffic.
2. With the increasing number of sellers entering the platform, product promotion and marketing strategies need to be more refined. Brands and merchants should tailor their e-commerce operational strategies to their own characteristics and market demands.
3. Stay updated on policy changes and e-commerce trends to onboard during the dividend period and seize business opportunities. Also, keep an eye on new e-commerce strategies and operational tools introduced by the platform, and make full use of platform resources.
4. Flexibly utilize influencer collaborations to build brand image and reputation, which can help improve user trust and loyalty.
TikTok had an outstanding performance in 2023 despite facing challenges such as policy changes. It continued to expand into multiple new areas within the global business landscape. While TikTok expanded its market presence, numerous sellers, brands, and influencers sought to capitalize on the platform's opportunities.
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