Tik Tok has come upon a bit of a bump on the road and faces a significant reassessment in its business expansion plans, with the company forced to scale back its live eCommerce initiative in Europe and the US due to operational challenges and lack of consumer interest. Tik Tok has been trying hard to integrate live-stream shopping to try and harvest the same level of success its Chinese sister app, Douyin, has managed to amass. However, its initial efforts in The UK have been hampered.
As reported by The Financial Times:
“TikTok had planned to launch the feature in Germany, France, Italy, and Spain in the first half of this year, before expanding into the US later in 2022, according to several people briefed on the matter. But the expansion plans have been dropped after the UK project failed to meet targets and influencers dropped out of the scheme, three people said.”
A Slight Knockback
Tik Tok has since refuted some of these claims made by the FT, stating that the reported timeline for its commerce push is incorrect and that it’s focused on fixing issues with its UK operations before expanding, which is still in its roadmap. Tik Tok’s UK shopping push has also faced internal problems due to conflicts over management and working culture.
Last month, reports came pouring in that ByteDance, Tik Tok’s parent company, had been imposing tough conditions on its UK commerce staff, including 12-hour shifts, ridiculous sales targets, and questions on entitlements. Now, it seems that these combinations of challenges have led to a new dilemma for the app, once again underlining the variance between Asian and Western app use trends.
Social Media and social messaging apps have become a central element of everyday life in several Asian countries, with apps like China’s WeChat and QQ now used for everything from purchasing train tickets to paying bills, to banking, to buying groceries, and everything in between. This spells an opportunity for Western Social Media providers, particularly Meta, looking to use the Chinese model as a template to help it translate the popularity of WhatsApp and Messenger into even more ubiquitous and valuable functionality, which could see them become critical connection tools in various markets, solidifying Meta’s market presence.
However, for some reason, Chinese messaging trends never really translated to other markets. Meta’s Messenger Bots push back in 2016 failed to gain traction. Messenger became too ‘cluttered’ with its expanding set of features continuously piling on each other, which eventually caused them to scale back their messaging expansion plans in favor of maintaining alignment with its core use case.
The decision to scale back its eCommerce ambitions is a significant blow to Tik Tok’s expansion plans, not only from a broader revenue perspective but also in regards to revenue share and providing more monetization pathways for creators to prevent their top stars from ‘migrating’ to other platforms.
The Wrap
Monetizing short-form content has proven highly difficult for Tik Tok because its clips are too short for any sort of ad placements. Now that they’ve been forced to essentially ‘nerf’ their in-stream integrations, which will significantly limit creator earnings. It may not seem much, but this is what killed Vine.
Of course, Tik Tok has become much bigger than Vine ever did and is still growing, but highly gimped monetization capacity could end up being a big challenge for the app. On a case-to-case basis, it may not seem like a major move, but it is a significant shift, which will slow down Tik Tok’s broader expansion. It could hurt the world’s most popular app more than we initially might have thought.
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