TikTok is introducing live shopping in North America and intends to outsource its operations after the social media platform’s ecommerce efforts in the UK were unsuccessful.
Based in Los Angeles TalkShopLive will collaborate with TikTok to bring TikTok Shop to the United States. According to two individuals familiar with the operations, it will offer the underlying technology and support for live broadcasts presented by influencers, brands, and shops that want to sell their items on the app.
The firms are still working out the details, and no contracts have been signed.
TikTok Shop, which enables users to purchase things through links on the app’s screen during live broadcasts, was launched in the United Kingdom last year, marking the company’s first market outside of Asia. Thailand, Malaysia, Vietnam, Singapore, the Philippines, and Indonesia all have it.
The approach has proven profitable for TikTok’s Chinese sibling app, Douyin, which saw sales more than treble year on year in the year to May. During that time, it aired around 9 million live ecommerce broadcasts every month, selling over 10 billion goods.
The developments come as TikTok faces increased scrutiny in the United States, where legislators have expressed worries that the platform’s Chinese owners, ByteDance, have access to American user data – concerns that ByteDance rejects. Former President Donald Trump’s attempts to ban the corporation on national security grounds are being reviewed by the Biden administration. TikTok is also collaborating with the government on new data security policies to protect the data of US users.
Although TikTok intended to deploy shopping capabilities throughout Europe earlier this year, this was delayed because testing in the UK market failed to meet sales objectives and influencers and brands pulled out of the program, according to multiple individuals familiar with the corporate strategy. TikTok has previously rejected any official growth plans in Europe or the United States.
TalkShopLive has four years of live commerce expertise, supporting thousands of livestreams each year and collaborating with companies such as Walmart and Microsoft’s MSN Shopping to offer the technology foundation for live shopping.
TalkShopLive earned $6 million in a seed extension led by Raine Ventures in July of last year, five months after a $3 million seed round.
One individual acquainted with the plans said, “TikTok wants a turnkey solution to this, someone who can assist handle the live shopping experience. The functionality is anticipated to be launched with significant brands over the next month in time for the Christmas season, they said.
TalkShopLive charges a 10% fee on livestream sales, which TikTok is anticipated to fund initially. Because of its technology, brands will be able to offer the same livestream on their ecommerce websites at the same time, driving sales outside of the app.
When it comes to market expansion for TikTok Shop, Tiktok stated that they are always guided by demand and are constantly exploring new and different options for how they can best serve their community, creators, and merchants in markets around the world. These efforts include exploring partnerships that further support a seamless ecommerce experience for merchants, which is an important part of our ecosystem.
Meta, which owns Instagram and Facebook, and YouTube have both dabbled with live shopping capabilities in recent years, with varying degrees of success. Meta is set to discontinue its live shopping function on Facebook in October and is still in the early phases of trying shopping on Instagram.
Meanwhile, TikTok has come under fire in the UK for its shopping function, after a Financial Times investigation uncovered an exodus of personnel from its ecommerce section in London, who complained of an intense working environment with unattainable expectations. After informing London-based colleagues that he “didn’t believe” in maternity leave, a top executive on the team was dismissed.
Participation in livestreaming is increasing in the United States, but slowly in comparison to other countries such as China, indicating that trial periods and consumer education are required to increase the usage of this technology on social media.