News / TikTok plans foray into fulfilment, promising 'a better e-commerce experience'

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An unlikely player is preparing to enter the e-commerce fulfilment space, TikTok.

Widely embraced by younger audiences for the plethora of entertaining videos on its social media platform, TikTok is recruiting managers in the US to set up a fulfilment operation not only for the US, but globally.

It wants somebody who can manage a free returns programme, plan inventory movement and develop the service in the US,  someone to create a fulfilment centre and a candidate to be tasked with building a global warehousing network.

The online platform, which has an online sales channel called TikTok Shop, clearly has strong commercial ambitions that it wants to underpin with a fulfilment service.

“With millions of loyal users globally, we believe TikTok is an ideal platform to deliver a brand new and better e-commerce experience,” it said.

“By providing warehousing, delivery and customer service returns, our mission is to help sellers improve their operational capability and efficiency, provide buyers [with] a satisfying shopping experience and ensure fast and sustainable growth of TikTok Shop.”

According to a report in the UK Financial Times, the company is exploring a live shopping feature in the US that could serve as a product recommendation tool for creators on its platform.

Rick Watson, founder and CEO of RMW Commerce Consulting, said TikTok was probably following the lead of China’s Alibaba platform in how a popular marketplace can help its brands handle promotional demand.

“If a creator gains large popularity on a platform, there is the possibility to monetise this by creating branded products through a deal with a manufacturer,” he explained.

And the market looks promising. ‘Social commerce’, as shopping on social media sites is known, is a $37bn market in the US and Insider Intelligence predicts that some 23.7m US consumers will make at least one purchase through TikTok this year – either directly or via affiliated links.

However, the company is unlikely to build its own warehouses and fleets of trucks and airplanes, believes Mr Watson, at least not in the short term. He expects it to strike up partnerships to establish its network of third-party warehouses, carriers and fulfilment providers.

One such partner could be Shopify, with which TikTok struck an agreement last August and which has intensified moves this year to build up its own network of fulfilment centres.

Mr Watson does not expect ‘Fulfilment by TikTok Shop’ to hit the market this year. It will likely launch operations in 2023 or 2024, he said.

The owners of YouTube and Facebook, which are dominating social commerce in the US today, should have some breathing space before a new competitor hits its stride.