and social media giant Tiktok maybe building its own product
fulfillment centers here in the U. S. That
could directly challenge amazon. So according to job listings
, the company looking for logistics and fulfillment experts signaling
that it does want to dive deeper into e commerce
. Well, Tiktok has over a billion users.
It's been done downloaded more than 200 million times just
in the United States. And the move to e
commerce could signal Tiktok's commitment to online shopping is its
next major revenue stream following the explosive growth that we've
seen in the ads business. So joining me now
is Cheddar News senior reporter Michele Castelli. Oh Michelle
, Good to see you on this friday. And
what do we know so far about Tiktok's e commerce
plans? Well there's been several job listings over the
past couple of weeks and several key hires that make
people think that Tiktok wants to expand into the e
commerce space here in the U. S. A
lot of these job listings are around people who can
lead logistics and fulfillment centers, basically if you compare
this to an amazon warehouse, the people who actually
know how to get the product to the places they
need to be. Not necessarily create their own fleet
of delivery services, but really just get the products
in one space and then ship it out in a
timely manner. Now this isn't really foreign territory for
Tiktok. They actually do have Tiktok shop which does
this in areas of Southeast Asia as well as the
U. K. Countries like Indonesia have really developed
this. But it is the first time that they
would start broaching into the U. S. Territory
. So that's why I think lot of people are
interested especially because online shopping is booming at such a
fast pace. It is it'll be interesting to see
of course if that continues into these winter months.
But Michelle why do these social platforms want to get
in to e commerce? I mean it kind of
seems like the golden ticket right? You know it's
just such a growing business area and it's just such
revenue potential. Especially if you think about brands who
are going direct to consumer who want to buy advertising
. So right now a little bit less than half
of social media users use um use uh commerce options
within that social platform. Insider intelligence puts it at
about 100 2.6 million users at the end of this
year 48.7% of the base. But just by 2025
just three years later we're going to reach a little
bit north of half, 51.8% of users will buy
stuff on their social platforms. That's 100 14.3 million
users. So this is definitely an area for revenue
. And there is an easy way to show that
your ad led to a direct sale because people will
click and buy things. So I think as people
get annoyed with seeing so much advertising on their feed
. These more organic types of ads. Things that
directly to buy things is going to be a way
to add more ads without making it feel like you're
just seeing a lot of different commercials and different ads
in your feed interesting. Okay, so Tiktok obviously
jumping on board, but there's instagram reels, there's
youtube shorts, Snapchat Pinterest. I mean what's the
competitive advantage that Tiktok has? Well, you know
, one of the things that you can think about
is the fact that Tiktok has, that hashtag Tiktok
made me buy it and it really does lead people
to discover a lot of new products that they might
not have seen. In fact when you just look
at people, when they say whether or not platforms
inspire them to buy purchases. Tiktok comes forth about
one out of four people who are on Tiktok say
they are inspired to make a purchase by a product
. They see their 15% actually make a purchase directly
because of the platform. So there is a lot
of growth opportunity there, it's a little behind facebook
instagram and Youtube but it is a younger platform and
we just see that products go so viral on Tiktok
, it's all about the discovery of that ray product
. Just a few weeks ago, I went around
the newsroom and asked people if they bought products off
Tiktok or instagram and a lot of us have bought
a lot of random things from makeup products to crystal
halls, I bought that viral back cracker but it's
just such a good tool because that algorithm really does
surface things that you might be interested in and that's
where there's such e commerce potential. Okay, interesting
. So what about amazon? Can Tiktok take on
amazon spoke to a few experts and one of the
things they pointed out is they think amazon will always
be out there when it comes to buying your basics
, think your toilet paper, your paper towel rolls
, That's not Tiktok space where Tiktok wants to be
, is maybe those direct consumer brands that want to
reach a customer, They find themselves with a viral
product, but they don't know how to actually run
a warehouse and get those products to people in a
timely manner. So what would happen is similar to
how amazon works with sellers. That brand would give
a bunch of products to a Tiktok warehouse in theory
. And then when those sales come through through Tiktok
, Tiktok would take care of all the logistics,
how much you have in stock, how much,
how that will actually be shipped to the person who
buys it. And that just, and they'll take
a portion of that sale. And that's kind of
how amazon works with its partners as well. So
I don't think it's gonna directly take away from amazon's
business. But when you look at viral products,
especially smaller brands, this could be a really good
growth potential. Okay Michelle, you always got the
latest insight that cheddar news, senior reporter Michele Castelli
. Oh, thank you. And sorry to more
on this topic and other news Michelle has been following
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