Moving to the US market? Can TikTok Shop achieve a comeback by building its own logistics?

It is learned that recently, TikTok announced the financial results of its European business in 2021. In the past year, its turnover in Europe has increased nearly 6 times, but its losses have increased by 37%.

Data shows that TikTok's turnover in 2021 was about US$1 billion , while its turnover in 2020 was only US$172 million, a year-on-year increase of 477% . Among them, revenue mainly came from the European Union, reaching US$532 million, and the British market was US$279 million.

Despite its rapid growth, TikTok's pre-tax losses amounted to $896 million ! The main reason is the increase in labor costs . Its average monthly number of employees in Europe increased from 1,302 in 2020 to 4,396 in 2021. In addition, TikTok's sales and marketing expenses also increased by nearly 90% to $666 million, and administrative expenses increased by nearly 30% to $212 million.

According to the original plan, TikTok will launch TikTok Shop in Germany, France, Italy and Spain in the first half of this year, and expand it to the United States later in 2022. However, due to the failure of its business in the UK, TikTok has to rethink its expansion plans.

TikTok may launch live shopping platform in the United States through outsourcing

According to foreign media reports, TikTok may establish a partnership with Talk Shop Live in the United States to launch a live shopping feature in the United States. The two companies are still finalizing the details of the cooperation and have not signed any contracts.

▲ Picture from Reuters

TikTok plans to build its own logistics system by hiring a large number of new positions

As we all know, supply chain issues have always been a major weakness of TikTok. Due to the lack of overseas logistics foundation, TikTok currently still relies on third-party sellers to ship their products themselves or provide cooperative logistics providers, and transportation efficiency cannot be guaranteed.

▲ Picture from LinkedIn