TikTok Shop - an online gold mine for Sellers and Creators

TikTok – A Different App

Most young people aged 15-30 spend a lot of time using TikTok, while business people over the age of 30 do not use TikTok much. This can put them at a disadvantage when trying to market and sell on the platform as it works differently than Facebook, YouTube, or Instagram.

The initial appeal of TikTok was that it provided an easy-to-use platform for the majority of young people to create videos of themselves imitating their favorite tracks. Now, people upload more original videos, covering more genres. It is this increase in video diversity that has made it possible for everyone to sell on TikTok.

When you open the TikTok app, you'll see videos on the For You page, a collection of videos that TikTok's algorithm believes will capture your attention. These include relevant advertisements. These videos are often from strangers but are of the kind of content TikTok believes you'll enjoy. This is very different from apps like Facebook or Instagram which focus on showing posts by people you already follow.

TikTok requires people and brands to upload vertical videos because this is how most people work with mobile devices. The fact that the video content is in vertical format along with the short video length has not created an inconvenience in re-posting on other platforms.

TikTok's Generation Z and Millennial users are reacting to traditional advertising practices. The absolute worst mistake is to post anything that resembles a traditional ad, especially one that uses scripted dialogue.

However, that doesn't mean you can't use TikTok to market and sell to its young audience. They are still shoppers who are still genuinely interested in many products. Brands just need to be savvy about their marketing and make sure their customers get value from their TikTok channels.

User-generated content that works well on TikTok is often entertaining, curious, and easily receptive.

What is TikTok Shopping?

TikTok Shopping provides a way for TikTok users to purchase in-app products without opening a web browser to go to a separate eCommerce store.  According to the company's spokesperson, TikTok shop aims to provide users with the perfect solution for smart shopping. By using the power of community on TikTok, buyers and friends achieve common values.

When a business sets up a TikTok Shop, that business will have a dedicated Shopping tab on its profile. This is represented by the shopping bag icon. Customers can then browse and select products in TikTok and then purchase the product, either in TikTok or go to the company's online store to pay.

Initially, TikTok tested Shopping with some Shopify sellers in the US and UK, then expanded to Canada and more countries.  Kylie Cosmetics, for example, was one of the first stores to allow their customers to shop directly on TikTok. One of the most successful case studies since TikTok launched the TikTok Shop.  Kylie Cosmetics owns a TikTok channel with more than 3M followers, and people can make purchases right on the TikTok app, click on purchase to select a product, and start the checkout process.

Advantages of TikTok Shop:

• The young and fast-growing user base - TikTok's user audience ranges from 12-40 years old, which is an age with great purchasing power and a certain e-commerce buying experience. Over the years, the user base on TikTok has also grown more. Currently, the user age on TikTok is also trending higher than the original.

• Unlimited explosive potential -  A special feature of TikTok's content distribution algorithm is that the content is given absolute priority. For viewers, it's the "For You" tab on the app interface, for merchants and creators. This is an opportunity for the video to be distributed to millions of viewers overnight. However, the condition is that your video content must be really attractive.  Unlike other social media platforms and e-commerce platforms that need time to analyze the user's behavior and personality to choose the audience that will distribute the content every time that user posts new content, Tiktok's algorithm does conversely, test-deliver content to a certain number of users for testing and are ready to rapidly expand the distributed audience upon confirmation of a good signal from the tested sets.  This is especially important for new sellers, shops will be equal before the opportunity to distribute content, it doesn't matter whether the shop is new or old, has not followed, or has many followers. Everyone just needs to focus on creating good content, the opportunity will come almost immediately.

• High conversion rate - The strength of Tiktok shop is that it operates on a social networking platform that focuses on short video content. Videos are often more emotional, motivating, and therefore easier to convert than other forms of content (images, descriptions, etc.). This makes it easier for sellers to achieve higher sales than doing business on other platforms like Facebook or Amazon.  Youtube implements Short, Shopee Indonesia has converted Shopee live into Shopee video and it will probably be similar to other e-commerce platforms. Short videos or Shopee (Indo) have many similarities with Tiktok, from the user interface to the way it works. Tiktok has been very successful in driving an important shift in video content creation.

Content is more important than advertising

A big difference between the Tiktok Shop platform that sellers need to pay attention to is the problem of advertising. Currently, the world's Tiktok still mainly sells display advertising and this is an important source of income today. However, if you look at China's Doujin, it is easy to see that the density of paid-for-buy ads is not much. Sometimes you can't see Douyin all day long.

Tiktok wants to retain users through increasingly quality content, so they will encourage brands to put in the effort to create good content instead of paying to have bad content broadcast. Competition between sellers and KOCs so will be mainly about content – ​​whoever has good content will get more distribution.

Disadvantages of TikTok Shop

Conversion does not come from a need - On e-commerce platforms like Taobao, and Amazon, the demand usually comes from buyers, then they actively find products on the floor, then they consider and make decisions based on reputation indicators. of the seller (shopping age, sales, rating rate, response rate, etc.) and price. From the above reports, sellers can clearly understand the success or failure of their business strategy, from which they can continuously improve. 

However, with the TikTok shop, sellers can't do it all.  On TikTok shop, it's a little different, viewers' needs are formed or awakened from emotions when watching videos. From the videos, new buyers begin to get interested in the product and make a purchase decision. The video must appear at the right time to arouse the emotions of the buyer. This means that it is difficult for sellers to predict the buyer's journey in advance. This is a big challenge for the seller and the KOC.

Traffic

At the TikTok shop, traffic is everything. There is traffic, there is conversion, and no traffic means no new orders. Sellers on Shopee are often used to building sustainable stalls with good operating index, high reputation scores, product scores, etc.

After initial efforts, such booths will bring in regular revenue because the floor will actively regulate traffic for quality booths. TikTok shops will not be like that, your content is only distributed (i.e. traffic to the shop) when you post quality content. If you're lazy and you don't have new content, chances are your store won't be displayed anymore, no matter how much you have won. With TikTok - your content should always catch up with the trends.

What does Tiktok Shop's operating model include?

Seller: need to register a business or owner of an individual business

KOC/KOL: can register as an affiliate (there will be conditions e.g. channel minimum 100k followers) 

The seller will be charged when the buyer places an order successfully. In the US / UK market, the TikTok fee is 5%, in Indonesia, it is 1%. In Vietnam, Tiktok Shop can start with a 1% fee and will gradually adjust depending on the strategy. 

Post products: sellers will post products with images and descriptions similar to what they are doing with Shopee. The online store on TikTok shop is still adding many new features, promising to support stores in the future.

Payment: as an intermediary to collect fees on successful orders, so Tiktok will not want to accept cash payment on delivery (COD), the buyer's money needs to be transferred to Tiktok's system first. when paid to related suppliers and service units, after deducting Tiktok Shop's commission fee. The COD form does not guarantee this process is transparent and secure, which may be the main reason why Tiktok delayed the launch of the TikTok shop in Vietnam for the past 2 years.

Shipping: Tiktok Shop's shipping partner will go to the seller's warehouse to pick up the goods and deliver the goods to the buyer, similar to the current Shopee. Like Indo, in Vietnam, Tiktok shops work with J&T to process all orders.

How to set up TikTok Shopping

You need a TikTok for a Business account to set up TikTok Shop.  First, consumers watch a video with a TikTok Shopping link, showing them clickable Shopping cards that take them to the relevant TikTok Shopping tab. However, at this point, TikTok has shipped them to the retailer's Shopify store to complete the process at checkout.

This process is still possible if the retailer prefers. However, you can now keep the transition in TikTok if you want. According to Ray Cao, managing director and global head of operations and product strategy at TikTok, “We offer two integration points: one is directly on TikTok, and two – we will still provide the flexibility for users to convert on the merchant's website.” 

The shopping tab is very important If you're running a TikTok Shop, you need to see the Shopping tab as an extension of your eCommerce storefront. Therefore, you need to design and optimize it so that it looks attractive. So make sure your product images are as engaging and clear as possible.

Keep your product titles under 34 characters to ensure they remain fully visible; however, you can write a more complete description and include all the necessary details about your product capable of answering the customer's question.

How customers approach products on TikTok seller

• Through Livestream: Sellers will live stream and attach the products they want to sell on their Livestream videos, through the live streaming process, viewers can generate demand and order products.
• Through the booth of TikTok channels: Users watch the video, then go to the personal page of that TikTok channel, and then visit the booth to see the seller's products.

How customers buy products on TikTok shop

After accessing the product, customers can order directly on the TikTok App.  After approaching the product, the customer saves the product name or product keyword and then goes to Shopee, Amazon, Google, and Facebook to search for products to compare and most likely will buy in the most suitable channel.

How To Sell On TikTok Shopping

There are 2 ways for you to sell on TikTok shopping: Self-Selling and Asking others to sell.

Self-selling: you will create your booth, post products, and build your TikTok channel and Livestream sales on TikTok's platform.  The advantage of this way is that you will not have to share the profits with others.  The downside is that it takes more time, resources, and effort. 

Ask others to sell: You have a good source of goods, then you create a store and collaborate with content creators on the TikTok platform (Content Creators). After cooperation, they will link the channel with your booth and make plans to run product ads, review or Livestream to sell.

Note that you should only choose creators with content aimed at your customer base, and at the same time, the channel has a stable number of followers and interactions (follow > 10k, interaction per video >10k, the channel does not violate no no. is limited).  The advantage of this way is that you can do it easily, with less effort.  The downside is that you have to share the revenue with the collaborators, in addition, the project may fail you if you choose the wrong person.

Building a successful TikTok Shop

You need to make sure that you have done all the basics for your business TikTok account. Start by reviewing your TikTok profile. You don't have as many characters as some other social platforms, but use the little space you have to provide accurate information about your brand. It is important that you make sure your account contains standard SEO keywords, and talks about the product (or category) you are selling, and at the same time, the words must be read fluently, and automatically easy to remember though.

Since you may be targeting Generation Z (or even Generation Alpha), make sure to speak their language. Don't sound like an old friend trying to sell them something, even if that's your intention. Lots of cool emojis included, but make sure you don't accidentally use anything inappropriate.  You need to make sure people have a convenient shopping pass without leaving TikTok. Ideally, you need to prepare a banner or post or landing page, or video that guides people in detail on how to buy in your shop.

In addition, you need to prepare a lot of product content. However, don't just post product promotional videos. TikTok users are marketing savvy and skeptical of the ads that abound. Combine videos promoting the items in your catalog with other entertaining video clips. Try to make your promotional videos more interesting, and maybe add a bit of humor to them.  Remember, people don't go to TikTok to shop; they come to watch entertaining videos. However, they may decide to purchase if your video catches their attention and they don't have to go through too many steps to buy their favorite item.

Use branded hashtags

People won't use your TikTok Shop if they don't know about it. Therefore, you need to plan your brand promotion strategy specifically. One way to do this is to use Hashtag Challenge Plus, which allows users to shop for sponsored hashtag-related products.  You associate a paid hashtag with a specific challenge you pose to TikTok users.

Don't forget the power of influencers on TikTok

1. Influencers/Kols are still one of the most successful marketing campaigns on TikTok.  In the top 13 case studies about marketing and creating an influence on TikTok, there is the presence of brick-and-mortar retailer Walmart.  Everyone knows Walmart as a brick-and-mortar retail but has begun to emphasize the power of influencers on TikTok.  Influencers with personal influence, are knowledgeable about their audience and what they are doing to keep people active on the TikTok platform.

Affiliate Marketing on TikTok

Similar to other e-commerce platforms, TikTok has also implemented Affiliate Marketing to connect sellers with Affiliate Marketers.  Affiliates are divided into 2 types: Affiliates for Sellers and Affiliates for Creators.  You can be both a seller and an affiliate for your products or the products of other sellers. As for creators who do not have a product, you will have the right to choose any product from the sellers on the TikTok Shop for affiliate marketing

Determine the approach to Affiliates for TikTok

With affiliate marketing on TikTok, you can start in one of two ways:  You choose the products you want to do affiliate marketing first and then create compelling videos on TikTok to convert them. This way, you need to take the time to thoroughly research what the commission program and affiliate networks are like. Then, you choose the most suitable product (interest, understanding, high commission, and more) and plan to create video content for the product. In addition to affiliate marketing via TikTok, you can also share content on many other social networks. A person can choose for themselves hundreds of products at once or focus on only one product. However, you also need to think about the direction of TikTok channel development in the future. Your products and videos need to focus on a specific audience to be effective.

You focus on creating content and building a funnel first and then finding the right Affiliate product to convert. This direction is the opposite of the procedure above. Specifically, in the first phase, you will focus on the content development and popularity of the TikTok channel. Once you have a strong enough audience, you will begin to consider finding products to match your audience. At this point, it will be easier for your followers and video viewers to buy the products you recommend. However, with this approach, you will not initially collect the money immediately.

9 types of viral content make money Affiliate Marketing Tiktok

1. Education: Content is knowledge based on facts, and research, not personal opinion. The same topic, but a more creative way of introduction, explanation, and creativity will make your video get more attention.
2. Engineering/Technology: Show viewers the actual image of the product, with a review of the notable points. Products are not limited to smart devices, can be any electronic devices such as printers, cutters, or sewing machines, etc...
3. Advice/motivation: What makes this type of content easy to go viral on Tikton lies in the character's voice and the way the subtitles are displayed. Content needs to bring positive value, be useful, and can be applied to life.
4. DIY (Do it Yourself): The video needs to detail the process and let viewers see the results after doing it. Should insert more dubbing or subtitles to make it easy for viewers to follow.
5. Daily Tips: The content talks about the good, easy-to-do, useful tips in life. When posting this type of video, you should add "Tips / How to / Tips" in the caption.
6. Photography: Content is a way of taking a photo or posing, possibly using a camera or smartphone. The video needs to show the viewer the result to make it easier to visualize.
7. Instructions: Make videos about how to use software and tools, etc...
8. Fitness/health: Content focusing on exercise, gym, .. health issues helps viewers maintain good health habits.
9. Art: The main focus is related to the arts such as drawing, painting, digital art, calligraphy, sculpture, etc…

The future of TikTok Shop

For sellers, TikTok Shop has opened a new direction in Social Ecommerce.  TikTok currently offers three in-feed advertising products for you to sell:

Collection ads: allow brands to include custom, swipeable product tags within videos in their feed.

Dynamic Showcase Ads (DSA): Dynamic Showcase Ads help brands promote thousands of product SKUs through personalized video ads.

Lead Generation: Lead Generation is available in in-feed video ads and provides brands with an easy way to gather information from TikTok users through online forms.

Since the launch of TikTok Shop, many have mixed opinions that TikTok competes with big e-commerce platforms like Shopee. But in fact, the customer file on TikTok is also quite picky, mainly targeting young target groups.  However, with the miraculous development of TikTok, we can wait and see if they will have developed strategies shortly to develop more than in the present.  Even Youtube has started to partner with Shopify to launch a feature that allows users to make purchases while watching a video (it's the same as TikTok Shop), the jump of major platforms has shown competition and belief in the potential of Social E-commerce in the next few years and will continue to thrive.