TikTok steps into e-commerce with Shopify deal


Taobao Live, the live-streaming platform for merchants on Alibaba started its presales campaign for China's annual Singles' Day shopping festival on October 21. to data released by Alibaba, around 2:00 that day, the number of viewers on Li Jiaqi's live broadcast reached 160 million, while the number of viewers on Viya's live broadcast was about 140 million. 

Meanwhile, on the other side of the ocean, TikTok, a short video social platform and overseas version of Douyin, announced on October 27, 2020 that it has established a global partnership with Shopify, an international e-commerce giant and Canadian e-commerce platform.

In other words, TikTok is going to enter into the e-commerce field.


TikTok officially announce the entry to the e-commerce field


Shopify officially announced that: "We're building a unique partnership with TikTok that can allow merchants to use it as a channel to grow their business and reach highly-engaged users."

On Twitter that same day, Shopify also tweeted a short video featuring TikTok, featuring several large blue words that read: "Shopify merchants can now advertise their business on TikTok as videos!"

Specifically, merchants can create a business account on TikTok (TikTok For Business account) and select which product they would like to feature, then, and video ads are automatically generated that drive to their Shopify stores for checkout.

Ready-made templates designed specifically for commerce mean merchants of any size can take advantage of the TikTok channel using their existing imagery or video to generate ads. Merchants will be able to target their audiences across gender, age, user behavior, and video category, and then track the campaign's performance over time. The campaigns' costs will vary, based on the merchant's own business objectives and how much they want to spend.

To that end, Shopify merchants can also install a tool called "TikTok Pixel", which can help them to more easily track conversions driven by their TikTok ad campaigns. 

Also, to encourage merchants to advertise more on TikTok, TikTok is offering a $300 ad credit to get started with their first TikTok campaign.

In addition, the two companies also partnered on a #ShopBlack campaign. Running from November 10 to 15, TikTok users can spotlight their favorite Black-owned businesses using the hashtag #ShopBlack. 

The campaign, which features a custom branded effect, music and creator content, will highlight products from more than 40 Shopify merchants, giving TikTok users a resource to support Black-owned businesses. 

At present, the channel is now available in the US, and will roll out into select markets in North America, Europe and Southeast Asia in early 2021.

In the coming months, Shopify and TikTok will also work together to test new features that will further optimize merchants' videos and profiles.


The reasons that TikTok partners with Shopify


Shopify explains the two's partnership with a set of data.

• TikTok is one of the fastest growing entertainment platforms in the world, with 100 million users in the US alone.

• TikTok is the most downloaded app in the App Store, with over 2 billion downloads.

• On average, users spend 52 minutes a day on the TikTok app.

A key factor in this partnership for Shopify and its platform merchants at large is the sheer volume of traffic on the TikTok platform.

In fact, Shopify's current strategy is to take advantage of online sales and target the growing trend of multichannel demand. After all, the epidemic has boosted Shopify's GMV (gross merchandise volume), and Shopify's share price in general is expected to rise significantly in 2020.

Meanwhile, an official TikTok study showed that 88% of users said they discovered new content they liked while using TikTok, and about half said they discovered new products through ads posted by brands on TikTok.

For this reason, TikTok believes that brands are an important part of the TikTok experience and that TikTok users like to be associated with the brands they are interested in. Through this partnership, Shopify merchants will be able to more easily tap into the creativity of the TikTok community and be discovered by more users, and their marketing will be optimized.

"We are delighted to partner with Shopify and provide a channel for their merchants to reach new audiences and drive sales on TikTok. We're constantly exploring new and innovative ways to connect brands with our users, and Shopify is the perfect partner to help us grow and expand our commerce capabilities globally" said Blake Chandlee, Vice President, Global Business Solutions at TikTok, in a statement.

It's easy to see why TikTok is more interested in the increased commercial power of the platform as brands continue to join in. It means that TikTok's label is not only a hot short-form social app, but also an "eye-catching, money-grabbing" e-commerce channel.

However, as TechCrunch says that Shopify isn't the first to recognize TikTok's potential as a new type of social shopping platform.

In the midst of the U.S. government's ban against TikTok, one giant has come into the spotlight - Walmart.

On September 19, Walmart posted a statement on its official website about a potential investment and commercial agreement with TikTok Global.

"We are excited about our potential investment in and commercial agreements with TikTok Global. While there is still work to do on final agreements, we have tentatively agreed to purchase 7.5% of TikTok Global as well as enter into commercial agreements to provide our ecommerce, fulfillment, payments and other omnichannel services to TikTok Global."

It is understood that TikTok itself is constantly adding tools for merchants and other social shopping features, such as allowing users to add links to e-commerce platforms to their profiles.

What Walmart is interested in is TikTok's integration of e-commerce and advertising, hoping to develop its own marketing and advertising business through the acquisition. The media therefore believe that TikTok's ability to drive merchant traffic and sales is the main reason for Walmart's involvement in the TikTok-Oracle deal, even if there are still uncertainties surrounding the deal.

In addition, Walmart also partnered with Shopify to expand its online marketplace business in June, which has achieved good online sales results in the face of the epidemic.

Regardless of what the fate of TikTok will be in the United States, its layout in the field of e-commerce can be said to be a big trend.

Since 2016, there have been more than four years for the development of live commerce. Taobao Live is the first to focus on live commerce, followed by JD.com, Suning and other e-commerce platforms. After this, short video platforms such as Kuaishou and Douyin have entered the track, and the form of "live e-commerce + short video" is beginning to emerge.

In 2019, live e-commerce became the hottest trend, and the total GMV of live e-commerce for the year was estimated by research to be more than 300 billion yuan. By this year, due to the impact of the epidemic, live streaming e-commerce has even ushered in a traffic bonus period.

Nowadays, with the layout of TikTok in the e-commerce market, what changes will happen to the short video industry in the future, it is looking forward to.

This is an article from WeChat official accounts Leifengwang (ID: leiphone-sz), written by Fu Jing, translated by Chris Yuan.