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TikTok plans to construct U.S. fulfillment centers

Introduction

TikTok, the popular social media app, is intensifying its foray into e-commerce by establishing fulfillment centers across the United States. This strategic move aims to bolster TikTok’s presence in the e-commerce sector and heighten competition with established players like Amazon. Recent reports from Axios reveal that TikTok has listed job openings for various positions related to these fulfillment centers, with aspirations for an international reach.

The platform naturally lends itself to shopping, with approximately 23.7 million users planning to make at least one purchase this year. TikTok is eager to capitalize on this trend, especially as users frequently engage with Amazon storefronts and third-party platforms that guide purchases like LikeToKnowIt and RewardStyle.

In addition to establishing fulfillment centers, TikTok is exploring the potential implementation of a QVC-like shopping feature. Although live shopping has seen an uptick in popularity, its widespread acceptance remains uncertain. TikTok has already seen some live shopping activity, but it has not yet fully adopted the QVC format. To this end, the platform is reportedly in talks for a partnership with Talk Shop Live to enhance its shopping capabilities. However, TikTok’s previous attempts to implement similar features in markets like the UK and Asia were met with challenges due to creator authenticity concerns. Users tend to prefer genuine content from creators rather than highly produced shopping events.

This e-commerce push follows a wave of layoffs at TikTok, which affected around 1,500 employees in July 2023. Although layoffs are becoming common across tech companies due to economic uncertainties, TikTok's shift towards e-commerce may signal an effort to diversify revenue streams, currently heavily reliant on advertising. By tapping into the lucrative affiliate marketing sector, TikTok is looking to secure a slice of the e-commerce pie—one that is currently dominated by platforms capitalizing on conversions and marketing.

Keyword

  • TikTok
  • fulfillment centers
  • e-commerce
  • Amazon
  • job listings
  • live shopping
  • QVC-like feature
  • Talk Shop Live
  • creator authenticity
  • advertising revenue
  • affiliate marketing

FAQ

1. What is TikTok's new initiative in the U.S.?
TikTok is planning to construct fulfillment centers in the U.S. to enhance its e-commerce capabilities.

2. How many users are planning to shop on TikTok?
Approximately 23.7 million TikTok users are expected to make at least one purchase this year.

3. Is TikTok introducing a live shopping feature?
Yes, TikTok is exploring a QVC-like shopping feature and discussions are underway for a partnership with Talk Shop Live.

4. What challenges has TikTok faced with live shopping?
Previous attempts at implementing live shopping in markets like the UK and Asia had issues with creator authenticity, leading to challenges in gaining traction.

5. How is TikTok aiming to diversify its revenue?
TikTok is focusing on e-commerce and affiliate marketing as strategies to diversify its revenue, which heavily relies on advertising.

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