As we got excited about TikTok Shop going worldwide and revolutionizing ecommerce through livestreaming, the latest news say Bytedance is rolling the project back, at least temporarily.
What project? The one intended to expand TikTok’s livestreaming function to the United Kingdom, mainland Europe and the United States during 2022.
A couple of days ago, an article published by the Financial Times suggested its termination due to a combination of factors ranging from cultural biases to a blatant ignorance of European labor regulations.
That, however, does not mean Social Commerce has failed. On the contrary, it gives us a few insights about the reasons why this happening and the necessary corrections to make it work in the western world.
Content2Sell has kept a close on what the future of ecommerce looks like, and we believe this update is worth sharing among brands and companies that were considering social commerce to explore new selling channels.
Let’s get down to it!
How did we get here?
TikTok Shop is a full-on cultural phenomenon in China and Southern East Asia. In fact, Douyin made, in 2021 only, about USD 120.000 million and reached 380 million users.
Such eye-popping figures were promising to step foot in the European Union and consolidate their position as the worldwide social commerce and livestreaming torchbearers. And they actually thought they could export what worked there to the other side of the world, by only applying a few cultural adjustments.
Turns out the United States have threatened with banning TikTok for legal reasons regarding data privacy, which has also disrupted the big plan.
What could possibly go wrong?
“Functional tests”
As rumours started buzzing, Bitedance stated that this rollback was due to the bad results of the functional tests that were being carried out. Functional tests that allegedly had clear objectives regarding users and sales.
Low sales and dropouts
Sales were, indeed, much lower than expected. And that happened to affect many different sectors. From sellers to collaborators. So, after longing for sales to grow or the market to wake up, many dropped out.
Many brands have abandoned their livestreaming projects until further notice. Consequently, so did collaborators, who often work on sales commissions and saw poor quality products and no profitability in the time they invest.
A great resignation (not the one you’ve probably heard of)
TikTok disembarked in the UK in October 2021. Less than a year later, half of the original staff – about 20 people – quit their job claiming poor working conditions. As some of them reported to FT, they were expected to work 12 hours a day so they could work in Chinese time AND in the UK simultaneously and provide immediate reporting to their headquarters in China.
In response, TikTok praised the employees’ commitment and boasted about having a 30-week paid maternity leave and flexible working policies.
But that wouldn’t do it: as of today, Joshua Ma has been removed from the project, so an internal investigation is run, especially having defended maternity leaves shouldn’t be a right – although it is in the UK, as well as in Europe.
The cultural difference
The poor results of the first 9 months may be due to the deep cultural differences between Asian and Western markets. What is unlikely is the claiming of seasonal reasons. After almost a year in the UK, TikTok Shop has lived through the entire winter and spring season.
Instead, the most likely explanation is the cultural one. The market culture one. While TikTok Shop’s success in China and Southern East Asian countries is undisputable, the UK saw poor audiences, low sales, and a broken incentives strategy. So no, the warmest winter ever recorded cannot be blamed for pushing people to the beach.
Conclusions: where to go now?
The first conclusion we can jump into is: never assume that what works in a region will work in another one. Consumer behavior and consumption patterns change across borders. And that should be acknowledged before making the slightest move to a different market. This is why testing your business ideas is so important, and not only to launch a new product.
Secondly, never put all your eggs in one basket. I’m not sure there is one company that has made a one-way run on TikTok Shop. Primarily because a link to an online store is the first step to being on TikTok for Business. But poor sales may not pay the time needed to create a live event, promote it, and host it.
Diversification is the key, but that doesn’t in any case mean you should discard TikTok. The billion users in it ARE potential customers for your company. They just seem not to like livestreaming events and prefer other formats. For example, promotional product videos and short videos where brands show their most human side.
Who knows. Amazon is working on Amazon Live, and may have relevant insights on how cultural biases affected such a promising venture. In the meantime, make sure your content is up to date with what your audience wants, so it’s engaging. And, more importantly, adapt it to the requirements of each platform you use.
