TikTok went live Tuesday with its U.S. e-commerce product TikTok Shop in its latest bid to capture online shopping dollars and compete with e-commerce giant Amazon.
TikTok Shop allows users to shop tagged products directly from videos and live streams on its For You pages, a stream of content tailored by the company’s algorithm for each user. The company is shooting to more than quadruple the size of its global e-commerce business to as much as $20B in merchandise sales this year, per Bloomberg.
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“TikTok Shop empowers brands and creators to connect with highly-engaged customers based on their interests,” the company wrote in a press release. “It combines the power of community, creativity, and commerce to deliver a seamless shopping experience.”
Alongside its shop, TikTok also launched Fulfilled by TikTok, a logistics solution where TikTok Shop stores, picks, packs and then ships sellers' products to customers, per its news release. Flowspace, a software platform and distribution network, is partnering with TikTok to provide fulfillment services for TikTok Shop sellers in the U.S., per a press release from Flowspace.
Flowspace has more than 150 fulfillment centers across the country and is the official fulfillment partner supporting French e-commerce platform Mirakl and the 300-plus retail marketplaces it enables.
“Flowspace is enabling merchants to provide the seamless experience customers demand,” Flowspace co-founder and CEO Ben Eachus said in a release. “TikTok is a powerful channel of social commerce, which becomes increasingly important as retailers everywhere seek to remain aligned with their customers.”
Last year, reports surfaced that Tiktok was initially planning to create its own system of fulfillment centers in the U.S. The company posted more than a dozen job offerings related to fulfillment centers on LinkedIn, Axios reported, with a goal to build an “international e-commerce fulfillment system.”
However, The Information reported in June that TikTok pivoted and inked U.S. warehouse partnerships with outside logistics firms that lease and operate warehouses to store inventory and fulfill orders for sellers instead of building its own network of warehouses.
The move comes as TikTok looks to grab a piece of an e-commerce pie that has grown substantially in the past five years.
E-commerce retail sales made up 15.4% of total sales in the U.S. in the second quarter, up from 9.6% in Q2 2018, per data from the Census Bureau. The percentage of e-commerce sales peaked at 16.5% in Q2 2020 as consumers shopped from the comfort of their homes during the peak of the pandemic.
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