TikTok will use outsourced tech to launch real-time shopping in the US

TikTok is rolling out live shopping in North America and plans to outsource its operations after the social media platform’s e-commerce experiment in the UK struggled to take off.

Los Angeles-based TalkShopLive will form a partnership with TikTok to bring the TikTok Shop to the United States. It will provide the underlying technology and support for livestreams hosted by influencers, brands and retailers looking to sell their products on the app, two of the people said.

The two companies are still finalizing the arrangements and have yet to sign any contracts.

The TikTok Shop, which allows users to buy products through links on the app screen during live broadcasts, launched last year in the UK, its first market outside Asia. It is available in Thailand, Malaysia, Vietnam, Singapore, Philippines and Indonesia.

The model has proven lucrative for TikTok’s sister app Douyin in China, whose sales more than tripled year-on-year in the 12 months through May. During this period, it hosted about 9 million e-commerce live broadcasts per month and sold more than 10 billion products.

The developments come as TikTok faces increased scrutiny in the United States, a concern among politicians that Beijing could access U.S. user data, given that the platform’s Chinese owner, ByteDance, has denied such concerns. The Biden administration is reviewing former President Donald Trump’s efforts to ban the company on national security grounds. TikTok is also working with the government on new data security measures to protect U.S. user data.

Several people familiar with the company’s strategy said that while TikTok had planned to launch a shopping feature in Europe earlier this year, it was delayed as experiments in the UK market failed to meet sales targets and influencers and brands pulled out of the plan. . TikTok has previously denied any formal expansion ambitions in Europe and the US.

TalkShopLive has four years of livestreaming commerce experience, facilitates thousands of livestreams each year, and works with clients including Walmart and Microsoft’s MSN Shopping to provide the technology infrastructure for livestreaming shopping.

Five months after a $3 million seed round, TalkShopLive raised $6 million in a seed round led by Raine Ventures last July.

“TikTok wanted a turnkey solution that would help manage the real-time shopping process,” said a person familiar with the plan.

They added that the feature is expected to roll out next month with big brands ahead of the holidays.

TalkShopLive takes a commission of about 10 percent from livestream sales, and TikTok was initially expected to cover those costs. Its technology also means brands will be able to simultaneously host the same livestreams on their e-commerce sites and drive sales outside the app.

“In terms of market expansion of the TikTok Shop, we are always demand-driven and constantly exploring new and different options to better serve communities, creators and merchants in the global market,” TikTok said. “These efforts include exploring partnerships to further support the seamless e-commerce experience for merchants, which is an important part of our ecosystem.”

Social media rivals Meta and YouTube, which own Instagram and Facebook, have experimented with live shopping in recent years, with little success. Meta will shut down its live shopping feature on Facebook in October and is still in early beta testing for Instagram shopping.

Meanwhile, TikTok has faced scrutiny for its shopping feature in the UK after a Financial Times investigation revealed an exodus of staff from its London e-commerce unit, who complained about its aggressive work culture and unrealistic targets. A senior manager of the team was replaced after telling London staff he “doesn’t believe” in maternity leave.

“Livestreaming engagement in the U.S. is growing, albeit slowly compared to other countries such as China, suggesting that trial periods and consumer education are necessary to encourage the use of the tool on social media,” said Katie, senior retail and e-commerce analyst Hansen said at Mintel.

Additional reporting by Hannah Murphy in San Francisco

Video: Breaking into the Live Shopping Market | FT Trading

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