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TikTok Scales Back Live-Stream Commerce Ambitions, Which Could Be a Big Blow for the App

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TikTok’s facing 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.

TikTok has been working to integrate live-stream shopping after seeing major success with the option in the Chinese version of the app. But its initial efforts in the UK have been hampered by various problems.

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.”

TikTok has since refuted some of FT’s claims, saying that the reported timeline for its commerce push is incorrect, and that it’s focused on fixing problems with its UK operation before expanding, which is still in its roadmap. But the basis – that its program is not going as smoothly as planned – is correct. 

TikTok’s UK shopping push has also faced internal problems due to conflicts over working culture and management.

Last month, reports surfaced that TikTok’s parent company ByteDance had been imposing tough conditions on its UK commerce staff, including regular 12-hour days, improbable sales targets, and questions over entitlements.

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Now, it seems like the combination of challenges has led to a new growth dilemma for the app – which once again underlines the variance between Asian and western app usage trends.

Social media and messaging apps have become a central element of day-to-day 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 buying groceries, banking, and everything in between.

That spells opportunity for western social media providers, with Meta, in particular, looking to use the Chinese model as a template to help it translate the popularity of WhatsApp and Messenger into even more ubiquitous, more valuable functionality, which could then make them critical connective tools in various markets, solidifying Meta’s market presence.

But for various reasons, Chinese messaging trends have never translated to other markets.

Meta’s Messenger Bots push in 2016 failed to gain traction, and after its Messenger app became ‘too cluttered’ with an ever-expanding range of functionalities, including games, shopping, Stories, and more, Meta eventually scaled back its messaging expansion plans, in favor of keeping the app aligned with its core use case.

Meta then turned to WhatsApp, and making messaging a more critical process in developing markets like India and Indonesia. That expansion is still ongoing, but the signs, at present, don’t suggest that WhatsApp will ever reach the same level of ubiquity that Chinese messaging apps have.

Which then leads to TikTok, the world-beating short-form video app, which has seen massive growth in China, leading to whole new business opportunities, and even market sectors, based on how Chinese users have adapted to in-app commerce.

The Chinese version of TikTok, called ‘Douyin’, generated $119 billion worth of product sales via live broadcasts in 2021, an 7x increase year-over-year, while the number of users engaging with eCommerce live-streams exceeded 384 million, close to half of the platform’s user base.

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Overall, the Chinese live-stream commerce sector brought in over $300 billion in 2021. For comparison, the entire US retail eCommerce market reached $767 billion last year.

Given this, you can see why TikTok would view this as a key opportunity in other markets as well – but as noted, Chinese market trends are not always a great proxy for other regions.

The decision to scale back its eCommerce ambitions is a significant blow to TikTok’s expansion plans, not only from a broader revenue perspective (and worth noting, TikTok’s parent company ByteDance recently cut staff due to ongoing revenue pressures), but also in regards to revenue share, and providing a pathway for creators to make money from their efforts in the app.

Unlike YouTube, TikTok clips are too short to add mid and pre-roll ads, which means that creators can’t simply switch on ads to make money from their content. That means that they need to organize brand partnerships to generate income, and on Douyin, in-stream commerce has become the key pathway to exactly that.

Without in-stream product integrations as an option, that will significantly limit creator earnings capacity in the app, which could eventually see them switch focus to other platforms, where they can more effectively monetize their output.

Which may not seem like a major risk, but that’s exact what killed Vine, when Vine creators called for a bigger share of the app’s revenue, then switched to Instagram and YouTube instead when Vine’s parent company Twitter refused to provide such.

Could TikTok eventually face a similar fate?

TikTok, of course, is much bigger than Vine ever was, and is still growing. But limited monetization opportunities could end up being a big challenge for the app – while it also continues to face scrutiny over its impact on youngsters, and the potential for it to be used as a surveillance tool by the Chinese Government.

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In isolation, it may not seem like a major move, scaling back its eCommerce ambitions just slightly as it reassesses the best approach. But it’s a significant shift, which will slow down TikTok’s broader expansion. And it could end up hurting the app more than you, initially, would think.

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These are the social media platforms we most want a detox from

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Photo by Solen Feyissa / Unsplash

Many people like social media, others find it addictive but they are not necessarily enjoying the experience when they are using it. In this category there are some people who would welcome a detox, even if this is only partial. Digital detox refers to a period of time when a person voluntarily refrains from using digital devices such as smartphones, computers, and social media platforms. A digital detox can provide relief from the pressure of constant connection to electronic devices.

Looking at the U.K., a new survey finds that the majority want to delete their Instagram account ahead of any other. 

This finding comes from the company VPNOverview.com and the results have been shared with Digital Journal. For the research, VPNOverview analysed the number of monthly Google searches in the U.K. for terms related to deleting accounts to see what platforms people want a detox from. 

This process found that media sharing social network Instagram was the platform people wanted to delete themselves from the most, with more than 321,000 searches a month from users wishing to do so. Recently, Instagram came under fire and was accused of copying other competing platforms like TikTok after big changes were made to the app, with some of these changes now being reversed. 

Facebook takes second place, with more than 82,000 searches a month in the U.K. At the end of 2021, Facebook saw its first-ever decline in the number of daily users using the platform and a 1% decline in revenue in the last quarter of 2022. 

With more than 73,000 searches a month for information on deleting accounts, Snapchat takes third place. In July of 2022, Snap, Snapchat’s parent company, announced that they would be debuting Snapchat for Web, the first ever web version of the app since its initial release in 2011. 

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Plenty of Fish takes fifth place, with more than 23,000 searches around deleting accounts made every month in the UK. It’s the only dating app in the top ten, with Tinder narrowly missing out in 12th place with 8,500 searches. 

            Rank          Platform          Monthly searches to delete account 
        1      Instagram      321,000 
        2      Facebook      82,000 
        3      Snapchat      73,000 
        4      Google      50,000 
        5      Plenty of Fish      23,000 
        6      Twitter      18,000 
        7      Reddit      14,000 
        8      Amazon      13,000 
        9      Kik      12,000 
        10      TikTok      8,800 

Also featuring on the table is online marketplace Amazon, which comes in eighth place on the list, with 13,000 searches from people wanting to delete their accounts every month. Amazon recently announced that it was increasing the cost of its Amazon Prime service by £1 a month in the U.K., with annual memberships shooting up from £79 to £95. 

Commenting on the findings, a spokesperson from VPNOverview tells Digital Journal: “It’s interesting to see the contrast of platforms on the list, and how it’s not just social media that people want a cleanse from following controversies around privacy and data collection. Platforms offering subscription services like Amazon are also taking a hit, with the rising cost of living meaning many Brits are having to cut corners on things they use every day.”  

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