TikTok and the Ecommerce Revolution

July 6, 2021

Online shopping is going through a major shakeup, and China is the epicenter. Verdict declares, “Watch Out Amazon, TikTok Is Coming for You with Short-Video Ecommerce.” Writer Elles Houweling introduces us to “618” (June 18th), an annual Chinese cybershopping festival that combines advertising with entertainment. Alongside traditional tactics like exclusive offers and discounts, retailers compete for attention with interactive live streaming events and the participation of internet influencers. Transactions can be made right on the social platforms that engage customers, smoothing the path to profits. Such developments may be no surprise from the nation that has the highest rate of ecommerce, according to research firm GlobalData. Houweling writes:

“Something that may come as news, however, is the speed at which short-video apps and live streaming ecommerce are taking over. Relatively new to the 618 game are social media platforms Douyin (China’s version of TikTok) and similar apps Kuaishou and Xiaohongshu, which are rapidly making their mark in the world of ecommerce. These apps have achieved something that traditional online retailers have long neglected: seamlessly merging shopping with entertainment. Chinese netizens are increasingly turning to social media platforms to make purchases. In the West, TikTok is not yet widely associated with the idea of ecommerce, but this may soon change. Recently, TikTok announced that it had entered into partnerships with several companies, including Wal-Mart, Shopify and L’Oréal, to bring the app’s ecommerce platform to a Western audience. We may soon find a cohort of Millennials and GenZs not only learning their latest dance moves from TikTok but also buying their daily products, a trend that may threaten well-established ecommerce behemoths such as Amazon. Moreover, social media platforms have introduced new forms of cybershopping. Soon short-video advertisements and live broadcasts may replace the traditional search and click model of online retail.”

TikTok is now testing in-app sales features in Europe. Wal-Mart just partnered with TikTok on live-stream shopping, a move GlobalData sees as a real threat to Amazon. Though that company now has Amazon Live, the feature seems unlikely to capture nearly as much attention as TikTok will command on Wal-Mart’s behalf. The article notes one of TikTok’s strengths is its recommendation algorithm, which factors in what users do not like as well as what they do. The AI’s uncanny knack for discerning preferences makes for a strong marketing advantage. Perhaps that was the plan all along?

Didn’t some hyperactive rich person call this method ACommerce? The A does not mean what you think it means. The A is for algorithmic. I think.

Cynthia Murrell, June 30, 2021


One Response to “TikTok and the Ecommerce Revolution”

  1. TikTok Is Big and Growing Bigger : Stephen E. Arnold @ Beyond Search on August 26th, 2021 5:05 am

    […] are we not surprised? Nikkei reveals results of its recent global survey of downloads in, “TikTok Overtakes Facebook […]

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