Outside of China, TikTok is testing the sale of in-app products Business and Economy News


His efforts to double the success of his successful Chinese cousin Douyin in foreign markets could pose a threat to Facebook.

TikTok of ByteDance Ltd. is working with brands such as the streetwear label Hype to test sales in apps in Europe, an action that will intensify its competition with Facebook Inc. and will further blur the line between social media and online shopping.

The popular video app hopes to replicate overseas the success of its Chinese cousin Douyin, who amassed $ 26 billion in e-commerce transactions in its first year of operation. TikTok has started working with market traders including the UK on ways to sell products directly to millions of users of the app, say people familiar with the subject.

Although TikTok has conducted promotional business campaigns in the past, current testing is a precursor to a broader launch of a global e-commerce service. So far, the prototype is only visible to selected participants and it is unknown when the company will launch the formal launch. A Hype representative confirmed the test without further comment. The storefront of the label under your TikTok account shows a large number of products with images and product prices, according to a screenshot provided to Bloomberg News.

ByteDance is aggressively moving into a $ 1.7 trillion Chinese e-commerce scenario in hopes of adding another mega-growth story to its stable ahead of a long-awaited initial public offering. Its goal is to manage more than $ 185 billion a year in e-commerce by 2022, based on the social media reach of TikTok and Douyin. Unlike Chinese rivals Alibaba Group Holding Ltd. or Tencent Holdings Ltd., ByteDance apps also enjoy a wide global fan base and co-founder Zhang Yiming wants to use it as a springboard to the online trading game.

“Chinese internet companies will go about encouraging the behaviors they believe are necessary for the next stage of ecosystem behavior,” said Rui Ma, a partner at Synaptic Ventures. “TikTok has a lot to learn from China and Douyin, but the dynamics and infrastructure of the international market are different, so they have to ensure that they adapt.”

The Internet giant remains a late participant in China’s social commerce scene, where influencers promote products to fans like a Gen-Z version of the Home Shopping Network. It has its interest-based recommendations based on artificial intelligence to help your e-commerce business catch up.

“TikTok has been testing and learning with offers and e-commerce partnerships, and we are constantly exploring new ways” of adding value, the company said in an emailed statement. “We will provide updates as we explore these important avenues for our community of users, creators and brands.”

The move comes as social media titans around the world are struggling to achieve their online retail share, a segment that will generate $ 5 trillion in sales this year, according to eMarketer projections . Last May, Facebook introduced new tools to enhance the shopping experience on its platform, as well as the Instagram photo-sharing app, and Pinterest has also entered e-commerce by channeling shoppers to their websites. merchants.

TikTok, meanwhile, had already begun testing the waters of online shopping through promotional links with Walmart Inc. and Canadian e-commerce firm Shopify Inc. Companies often label their products on TikTok’s social content, with links directing buyers to their own. sites, but users are still technically following the TikTok app. Facebook and Instagram allow marketers to set up app storefronts or channel users to third-party services.

Now TikTok aims to block users within its ecosystem to a greater degree. Brands like Hype will manage stores dedicated to the video platform, receiving orders and interacting directly with shoppers. While the Chinese company will not handle sales or merchandise on its own, it expects to sell more ads to merchants, increase traffic and reduce business.

In December, Zhang told global employees that e-commerce, combined with live streaming and short videos, offers an even greater opportunity outside of China, according to attendees who asked not to be identified. The company has also been quietly building a team of engineers in Singapore to grow TikTok’s nascent e-commerce operations.

It’s unclear how TikTok intends to proceed, but his Chinese twin offers clues. Last month, at a welcome party for Douyin’s one-year business, executives explained that the company intends to replicate its success with AI-recommended videos of online shopping. Scrolling through an endless stream of content related to physical goods, the startup aims to engage buyers in the same way that synchronizing videos captivated a generation of American and European teens.

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