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TikTok looks to adopt Amazon’s business strategy

  • TikTok seems be getting ready to expand into ecommerce according to a new jobs listing posted by the company.
  • The company is looking for employees to build a “global fulfilment centre” in the US.
  • If TikTok leverages its billion users and social media platform correctly to market its ecommerce, it could give Amazon a run for its money.

In a move that would continue to solidify TikTok’s enormous influence on the world, a new jobs posting on LinkedIn indicates that the Chinese app company is looking into taking a page out of Amazon’s playbook and expanding to ecommerce. This would serve as a subsequent revenue stream aside from its enormous ads business.

“The e-commerce industry has seen tremendous growth in recent years and has become a hotly contested space amongst leading Internet companies, and its future growth cannot be underestimated,” TikTok writes in the listing.

Ecommerce exploded out of necessity during the COVID-19 pandemic as millions were forced to buy from home. Global ecommerce rose from 15 percent of total retail sales in 2019 to 21 percent in 2021. Now, this number sits around 22 percent of sales.

According to a forecast from global financial services firm Morgan Stanley, the global ecommerce market still has room for significant growth and could increase from $3.3 trillion today to $5.4 trillion in 2026.

Importantly, the adoption of ecommerce over brick-and-mortar retail is growing exponentially in the US where TikTok is set to build its “global fulfilment centre,” specifically in Seattle, Washington according to the listing.

By leveraging its ravenous following of young Americans, theories abound that TikTok could become the preferred online shopping destination of Gen Z. Over 60 percent of TikTok’s users are Gen Z – currently the most sought-after generation of potential buyers by marketers for their untapped disposable income (around $360 billion according to Forbes.)

Gen Zers are reportedly using the social media and music platform more and more as a search engine to find things and locate information.

“With millions of loyal users globally, we believe TikTok is an ideal platform to deliver a brand new and better ecommerce experience to our users,” the social media powerhouse writes.

The company already operates “TikTok Shop” outside of the US, but this is more of a marketplace for users to buy and sell goods to each other, and for influencers to take advantage of monetization options. Last year, TechCrunch reported that TikTok was looking into expanding its online shopping features through a partnership with Canada-based Shopify.

It seems to us that TikTok is getting ready to take the plunge into world-wide online retail, powered by its ecommerce tech and bouyed by its social media users. Imagine getting ads for the company’s own products while surfing the app with taglines like “Delivers in three days,” or similar. Or influencers peddling discounts and coupons for TikTok’s online store.

The app has over 1 billion users. That’s theoretically 2 billion eyes that you can force to check out your products whenever you want. In South Africa specifically, the app has over 6 million users above the age of 18. Africa has a virtually untapped population of young, tech-hungry consumers. Recently the company launched a WiFi hotspot pilot program in SA townships to extend its reach even further.

However, it is still early days for the company’s ecommerce so it would be premature to begin assuming that it could one day match Amazon’s stranglehold on the business of online retail.

Currently, TikTok has headquarters in Los Angeles, New York, London, Paris, Berlin, Dubai, Singapore, Jakarta, Seoul and Tokyo.

(Image – Solen Feyissa on Unsplash)

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