Top Chinese players compete on Tik Tok, sharing $17.5 billion

Domestic live streaming KOLs rush to Tik Tok

The domestic e-commerce industry is no longer able to expand, and the top live streaming anchors have smelled the business opportunities of live streaming sales overseas. They have turned their attention to TikTok and embarked on a new journey overseas.

In July last year, Three Sheep began to try to expand into overseas markets, and decided to use Southeast Asia as a pilot. After completing the establishment of the overseas team and the overseas MCN agency "Three Sheep Network", good news came in January this year, winning the top spot in TikTok Singapore's live streaming sales list, and putting the "Malaysia premiere" of the second overseas stop on the agenda. At present, the Three Sheep IP has completed the layout of a 2 million fan matrix in Southeast Asia.

Another company that has also entered TikTok in Southeast Asia is Jiaogepengyou. As early as May 2017, Jiaogepengyou incubated an overseas local company in Indonesia. The following year, it began to build a Southeast Asian KOL matrix. In 2020, it established a US company. "At present, TikTok's overall overseas e-commerce is most mature in Southeast Asia, the United States is in its early stages, and the United Kingdom is relatively weak." Hao Xijie, head of Jiaogepengyou's overseas business department, said in an interview with reporters. According to Hao Xijie, there are currently three main things: marketing, bringing goods, and helping merchants solve problems related to live broadcasts, short videos and store operations on the TikTok platform. At the same time, Jiaogepengyou is also actively deploying overseas e-commerce training business, among which TikTok's e-commerce live broadcast training is the top priority.

Recently, Dongfang Zhenxuan was also exposed to be cooperating with Tik Tok, and posted multiple TikTok-related positions on recruitment websites, among which the monthly salary for TikTok store operation is as high as 40,000. On January 29 this year, in response to market rumors that Dongfang Zhenxuan might cooperate with TikTok in overseas supply chains, an insider responded that "the news is true."

Image source: Screenshot of Liepin website

In fact, there were already signs of Oriental Selection’s overseas layout.

At the beginning of 2023, Beijing New Oriental Xuncheng Network Technology Co., Ltd. applied to register multiple "EASTBUY" trademarks, and the international classification involved convenience foods, website services, scientific instruments, etc. In June 2022, New Oriental released recruitment information for relevant TikTok anchors. The job requirements required a certain foreign language oral foundation, good control ability and agile adaptability. The live broadcast is mainly aimed at the European and American markets. At that time, some industry insiders believed that Dongfang Zhenxuan was taking advantage of the momentum to expand overseas markets.

It is reported that as early as when the live broadcast of Oriental Selection went viral, countless netizens had already shouted: "I hope New Oriental can unleash its huge potential in cross-border e-commerce live broadcast sales, and let English teachers use their English advantages to become cross-border anchor sales."

In the past year, domestic leading MCN agencies such as 51Media and Yaowang Technology have explored overseas live broadcasting. In the view of Zhang Yi, CEO and chief analyst of iMedia Consulting, MCNs have turned to overseas markets because, on the one hand, China's social media and e-commerce platforms have been relatively mature overseas in the past few years, such as TikTok; on the other hand, China's cost-effective products have also attracted great attention overseas. In addition, the overseas Chinese community is large in size and has a high level of consumption. They are more familiar with Chinese brands and products, which is a guarantee of consumption capacity.

Live e-commerce organizations have set sail to overseas markets, launching a "beach landing war" and aiming at the broader overseas market. Compared with the increasingly saturated domestic market, the space and potential of the overseas market are becoming more and more prominent.

Is Now a Good Time to Bet on TikTok?

The popularity of live streaming sales is rising at a visible rate abroad.

According to public data statistics, the global social e-commerce market size reached US$724 billion in 2022, and is expected to soar to more than US$6 trillion by 2030.

At the same time, Tik Tok has also seized the market at lightning speed. As of June 2023, TikTok has been downloaded more than 3.5 billion times worldwide, with more than 1.6 billion users worldwide, including 1.1 billion monthly active users. The average daily time spent by American users on TikTok has continued to grow, from 39 minutes in 2020 to 45.8 minutes in 2022, surpassing the usage time of Youtube and Twitter, becoming the most popular social media for American users.

In September 2023, TikTok officially launched TikTok Shop in the United States, fully developing a fully closed-loop model. It is reported that 200,000 merchants have settled in the United States during the testing phase. Other public data shows that the number of TikTok Shop stores in the United States has increased from more than 300 to nearly 6,000 in 3 months, corresponding to a monthly GMV increase from US$6.23 million to US$340 million.

In early January this year, people familiar with the matter revealed that TikTok Shop has set a GMV target of US$50 billion for 2024, which is 1.5 times the target figure of US$20 billion for 2023. In addition, according to Bloomberg, TikTok expects to expand its e-commerce business in the United States tenfold to US$17.5 billion in 2024.

As TikTok's commercialization gradually deepens, overseas acceptance of models such as live streaming has been deepening, and TikTok has entered a period of bonuses.

However, it is worth noting that due to the different e-commerce environments, the way domestic live e-commerce platforms promote products is inevitably not suitable for overseas markets, and "localization" is undoubtedly a difficult problem that those who go overseas must overcome. This includes not only adapting to the needs of local users and creating content that conforms to local culture, but also religious beliefs, local culture, laws, etc., which are all issues that those who go overseas need to pay attention to.

With the continuous development of social media, the prospect of global social e-commerce cannot be underestimated. Among the companies and anchors that have gone overseas, whoever is the first to do a good job of "localization" will be the first to create a myth of wealth.

In 2024, more Chinese brands and wealth-making stories will emerge in the TikTok market. For those sellers who are still waiting, now may be the best time to enter the market.