TikTok is currently still the social network that enjoys the best health in the panorama of the global digital economy. While others fire, the company hires. While the others are experiencing a slowdown in user growth, the platform owned by the Chinese Bytedance is growing at a good pace year on year. But it has a problem in being able to monetize its 1.5 billion recorded in 2022.
Ecommerce is the strategy adopted by the company to try to increase revenues. A solution already adopted in China, where TikTok, which is called Douyin there, recorded a 300% increase in sales compared to the previous year in the 12 months up to May, with over 10 billion products purchased by users. Hence the decision to extend the same model to other countries, starting with the United Kingdom and the countries of South-East Asia.
The problems of TikTok ecommerce
But the launch of TikTok’s ecommerce, reports the Financial Times, has faced a series of problems. Mostly unexpected. Reports say that a large part of his staff has decided to leave their jobs because they are subjected to unsustainable rhythms. Furthermore, the brands that had decided to focus on the platform preferred by the ‘zeta’ generation would have taken a step back in their investments due to lack of sales and customers.
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Partly due to difficulties due to the very nature of TikTok (a social network focused on video, with little possibility of getting users out of the platform itself, more concentrated on scrolling through videos than on being attracted by the products). Partly because many would have complained about difficulties in shipping, errors, slowness.
The solution to this problem, largely of a technical nature, the company would have found in seeking support from startups. These, explains the FT, include ChannelEngine, TalkShopLive and YunExpress, which specialize in software that integrates shopping and order fulfillment technology.
Ecommerce as the main source of revenue
If TikTok wants to make its ecommerce the main source of revenue in the near future, it is necessary to outsource this technological part. But times are not the best. For the great American giants. But also for those emerging from Beijing’s digital economy. According to the FT, TikTok would have reduced its turnover estimates by at least 20% in 2022.
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The newspaper reports some statements by managers of companies who have decided to stop their advertisements on the platform precisely because of the difficulties encountered on its ecommerce. A figure that casts some shadows on the company’s future business model, which however still has the agility and dimensions to be able to remedy the problem.