TikTok Leans into Marketplace Footing: But Amazon Marketplace is the Target not Shopify

If you have been syndicating your products to TikTok and have the TikTok pixel installed on your storefront, you must make some changes by mid-September.

In news I originally missed, TikTok has decided to go a different way than Meta in eCommerce. Historically, social media sites like Instagram have offered two ways for creators/influencers to sell products through their social media platforms.

The traditional way is for creators to link back to their eCommerce storefronts. This requires the installation of a pixel at checkout time for the social media site to understand if the initial click resulted in a sale.

The second way is to push buyers to checkout through a Shop like Instagram Shop or TikTok Shop which is on-platform. Notably, the TikTok Shop payment methods include Apple Pay, Paypal, Klarna, and regular credit cards (via Stripe).

First, let's get this out of the way. This is not about TikTok competing with Shopify (despite the lack of Shop Pay, which I'm sure Shopify would love to remedy ASAP). There will be many ways (at least two I can find without much trouble) to connect TikTok Shop to Shopify to import your orders into your current Shopify eCommerce store.

Shopify is not threatened by the launch of a new marketplace, except perhaps in the smallest entrepreneur segment. To suggest otherwise would predict the demise of DTC eCommerce, which is still growing 2-3x faster than retail store volume. Let's tap the brakes here.

This is more about removing all purchase friction on TikTok such that it can follow the ByteDance GMV growth trajectory in China, which The Information has reported is growing 80% and reached over $200 billion in the last year.

Essentially, what I see happening here is a bold move from TikTok. The reason it's bold is that Meta never had the commitment, guts, whatever, to implement this on their properties -- preferring to give creators the option to either link off or transact on-site.

As a business move, I like TikTok's approach because it creates a "burn the boats" moment. If there is buyer friction, there are no excuses and the product team is forced to iterate and improve -- rather than tell people to link off. This should lead to more eCommerce innovation from TikTok going forward.

Given the influence of TikTok on other retailers like Amazon (check out Prime Day), this might be something to keep an eye on. Make no mistake, TikTok is courting Chinese influencers and sellers to American consumers (around 40-70% of Amazon sellers depending on who you listen to). This also explains TikTok's logistics plans: it's likely more for foreign than domestic sellers.

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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