TikTok Shop – A New Era in E-commerce? #LTM125

TikTok is really the first one now who's like offering the whole ecosystem, from fulfillment to support to a marketplace infrastructure. So they really came prepared, I would say. So this is why it's cooking up again.

And of course, because TikTok has such a hype since a few years now already.

Let's Talk Marketplace.

The Marketplace podcast with Ingrid Lohmer and Vanneri Dichter.

Hello everyone, and welcome back to let's Talk Marketplace. I'm Ingrid and I'm glad you tuned in to our second summer Deep Dive episode.

If you were with us two weeks ago, you might remember Stefan Wenzel, a German e commerce evangelist who gave us his thoughts on agentic commerce and how it's taking over e commerce and the Marketplace business.

And as we have been talking so much about AI and robots and all that technical stuff, I thought it might be nice to have a counterpoint and talk about the more social side of commerce next. What do you think, Valerie?

Yeah. Oh, yes, please.

I mean, you know, I'm like the networker of us and like, I truly, truly love this part of like the social part of it and the e commerce part. So, I mean, I use a lot of like, AI and it's many possibilities in our business and also privately instead of Googling, for example.

But even I was creeped out by some of the things Stefan had to say last time. So it would be great to turn the discussion into more human side of E commerce.

And again, we have just the right person with us today to discuss everything social. And this is German marketing and logistics expert and fellow podcast host, Christina Mertens. It's great to finally have you on the show, Christina.

Hi, Valerie. Hi, Ingrid. It's so good to be here. Thank you for inviting me.

Yeah, warm welcome for me as well, Christina. Always great to have a podcast colleague here, and not just because the audio quality is always so much higher.

Also because it's nice just talking with you and sharing your thoughts. So, yeah, why don't you introduce yourself a little bit? So for those listeners who have not yet tuned into the WeCommerce podcast so.

Far, I'm Christina, I'm 29 years old and I'm leading the marketing team at Everstocks, which is an international fulfillment company for e commerce brands. And this is like my main job, but I also do a lot of side gigs, but besides that. So for example, I host my own podcast, VCommerce.

It's called this one comes out every two weeks with news and then we have some special episodes. So Me, for example, I host a social commerce special series with the founder of the KA Fun, Jochen Krish, and my podcast co host.

He hosts a regular series on retail media. And besides that, I also recently discovered. Yeah. Speakerships and yeah. Interviews and writing articles for bigger industry magazines for me.

And yeah, that's what I do. Been in E commerce for eight, nine years now. Yeah.

Wow.

Yeah, I feel that.

So, Christina, since the start of TikTok shop in Germany, you have become one of its strongest supporters, defending the new platform against critics and even giving your keynote at K5 conference on how content creators offer a unique and personal entry point to the consumer journey, which might be the only thing holding up against AI commerce. How did you become TikTok shop's unofficial poster girl in Germany?

I wouldn't even frame it that way because I actually released an episode with Jochen one or two months ago where we discussed the start of TikTok shop in Europe. And there's a lot of room to improve, I would say.

But in general, I just like the idea that there's a new player and there's a new way of shopping actually coming to our smartphones and changing the way we shop. Whether it's going to be TikTok shop as the number one platform or another social commerce platform, I don't know.

But I just think it's a nice and strong move for such a big social media platform to really take the step and pushing so hard towards commerce and also offering the whole commerce ecosystem. And I always think it's easy to point fingers and say, oh, this is never going to work as we like to do in Germany.

So I would rather take a different perspective and just see the opportunities that are behind it. And also when you look at other markets where TikTok shop is operating or Douyin in China, there's just so much opportunity there.

So I'm always a fan of looking what we can learn from that instead of just criticizing. And yeah, the people that work there are also nice, which helps.

Yeah, well, I also agree with your point of view, actually, instead of like criticizing and seeing the opportunities. Tell us maybe a fun fact about you, Kristina.

Yeah, I was thinking very hard about that one.

I think a lot of people think that I'm a very organized person just because I do so much and I'm very outspoken about lots of things and I'm always at events. I'm like you, Valerie. I love networking and meeting people in person and then having my main job and my side gig.

So everyone assumes that I'M a very organized person, but it's like the complete opposite. I don't know any person who's more chaotic than I am.

So I'm basically under constant stress trying to handle everything and then staying on top of also e commerce trends and news and. Yeah. Putting everything under one roof and not go crazy. So, yeah, I would say this is a fact about myself that a lot of people don't know.

Might not be so fun for you all the time, I guess, but we'll.

Take it, I think.

Right. Okay, Christina. Right. I think we're going to have a. Yeah. A diverse discussion about tik tok shop and other social commerce areas today with you.

And that's great. So looking forward to that. And yeah, let's dive right into it after a very quick break and a look at one of our partners.

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And now they're expanding their marketplace network to France and Italy, two of the largest e commerce markets in Europe.

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Okay, then let's go into talking about social commerce. Okay, Cristina. I mean, social commerce is not really a new idea, is it? It's been flickering through e commerce on an off off over the last 10 years.

And I think it was one of those things you've been following the market just as long as we have. That has always been in the background and people were going like, yeah, when it's going to have its breakthrough.

So in what ways do you think does TikTok Shop differ from all the older attempts from, I don't know, Pinterest and Instagram and the like.

So first of all, I would say that social commerce has been around for 20 years already, not 10 years. I think it really started with the introduction of Facebook and Facebook ads especially.

I think this was the start of people getting used to consumerism on social media platforms, which is essentially what social commerce is. And Jochen actually published a paper back then. I think it was really 20 or 21 years ago.

Of course, all the social media platforms and the whole landscape looked a lot different from what we see now. But, yeah, it's a very old topic that's cooking up again.

I think the reason why that's the case is because the attempts have never been as strong as they are now.

So Instagram, of course, they had Instagram Shopping, which they then abandoned again in favor of investing more towards ads and not really integrating commerce into their Instagram platform.

But.

But then they didn't really commit to it, so they implemented it, but they didn't put enough resources on it. And what happened was that the customer journey eventually was not really nice.

The whole experience was not really nice because there was a lot of chaos with like fake sellers, fake products, lots of issues with shipping, with returns. There was such a gray area of who's responsible and who's not responsible. And I think that's where you have to base your strategy on really.

What does the end customer experience on your platform that have the idea, oh, it would be nice if people connect their products and then you can just shop on Instagram and then let's go, let's push it into the market. But really excel also at the fulfillment part of the orders and then returns, processes and everything.

They later introduced a checkout again in the U.S. i think it's still live now.

And of course we also see other ways of social media platforms pushing social commerce, like Pinterest with their shoppable pins, for example, where you don't check out on Pinterest itself, but then you're basically led to the product page of the, of the vendor. Snapchat has this. So all the big social media platforms have integrations with commerce platforms like Shopify, for example.

But TikTok is really the first One now who's like offering the whole ecosystem from fulfillment to support to a marketplace infrastructure. So they're, they really came prepared, I would say. So this is why it's cooking up again.

And of course because TikTok has such a hype since a few years now already.

Interesting because we recently did a research on the status of TikTok shop in Germany at the moment and a colleague of ours asked a lot of brands about their experiences.

And as you know as well, there were some cases of brands pulling out like about you for example, and other big brands that everyone would have betted on going for TikTok Shop, not even trying it like Knox or so. So, and, and now you say they came prepared. And I think our colleagues.

Ricardo's Idea was, okay, TikTok shop is still not an a marketplace or online shop. It's. It's an entertainment platform and commerce is an afterthought. How do these things go together?

Because you say in when you just said it is now the social commerce is now at a point where they can really do the commerce part as well and not just the social part.

Yeah.

So first of all, I don't really like the about you example because when you think about it from an about you point of view, they're a marketplace themselves. So they don't really have a high interest in pushing another marketplace like Tik Tok Shop.

And also I thought that after such a short time like publishing LinkedIn posts or giving interviews, after two weeks saying oh, Tik Tok Shop is, it's never going to work out, I think is ridiculous, like straight up.

Because more marketing than.

Yeah, exactly.

I think you have to also give new platforms a certain time to evolve because I didn't like the way the TikTok shop rolled out in Germany because it was basically, you got one pop up, like when they update the terms and conditions or whatever. You see it for half a second and you're like, yeah, whatever. So it basically said, yeah, TikTok shop is here now. And you're like, huh, what the fuck?

And then you click, click on the X and want to keep scrolling. And then it was just there. So a lot of people were also confused.

I collected a lot of screenshots like from the comment sections where people were like, what is this? Where can I buy this? Is the safe? Is this fake?

So there was not a lot of missionary work, so to say towards the end consumer, who's the most important part in this whole thing? Because these are the ones that have to buy. So a Lot of like very public voices I think went public with their opinion too soon.

I think you can really only say how it goes after maybe one year then you can say okay, what's the gmv? Which brands perform well?

I mean also when I, when I talk with brands who said like okay, we are we onboarded on Amazon our products and while we're not selling that, selling that much and I was like yeah, how long are you selling? Three weeks. Like okay, exactly, give it time. Right.

I also said like you need like minimum three months time to ramp up to like get the products listed, to get the visibility, the impressions, etc. And this is example. You can also like yeah copy to TikTok shop rights and especially there it's in whole Germany a new kind of platform or a new way.

And yeah, you also need to like learn it and the infrastructure still is not there how you have it maybe already in the UK or in the US Right. So I think this is also a main point.

Yeah I mean from a end customer perspective because I also shop on TikTok shop like not just because I'm in the E commerce space but I was really influenced to buy some makeup recently.

So first when it launched of course on the first day I ordered something from Miralina and also Hitchies just to see how it works and how quick the customer journey is from. I get an impulse to then eventually buying and I have to say this is really top notch.

So from thinking I want to buy something to the checkout is like 11 seconds. Not even because I have my Apple pay, I have my shipping address.

Of course the first time you shop on there you have to put all the information in there but then it's saved and then it's like so easy.

And I think a lot of brands or also retailers that look at it from a weird KPI view because they try to use the same KPIs that they use with like other marketplaces or maybe their shops on TikTok.

So they had like this huge expectation on okay, TikTok shop is launching and I'll do, I don't know, 10 million in the first month or whatever which is of course because I said not possible because the people have to get used to it. And then I mean also secondly it's a different way of shopping.

So if you think about it, if I go on Amazon and I want to buy something, I already have like a purchasing intent usually. So I go there, I look for a product, I buy it where on TikTok you're scrolling you get inspired. So let's take my customer journey as an example.

I bought like a powder from Charlotte Tilbury. It's like a makeup thingy. And I didn't buy it the first time I saw it. I think I bought it the 30th time I saw it.

So after watching 30 or 40 TikToks of creators presenting different creators presenting this product to me, at one point I was like, they all look so good. I need to have it. And then I bought it. So it's a bit different. And I think the journey is not as short as people like to think.

Where you go, you go there, you see it one time and you're like, oh, my God, I need to buy this. But of course, you have to get used to the product, to the brand before you buy it.

So how should classic marketplace sellers and brands adapt to a world where creators and communities are the new storefronts? So what would you say? What should brands do to adapt really.

Well on that one, use creators and communities. So, yeah, I think communities, there are two communities.

So you have your own community that is like your brand community, but then you can tap into a lot of creator communities.

So using creators essentially means you use creators to get access to their creator communities, and then you try to take people from their communities and make them part of your brand community. And I see a lot of successful brands. I wrote a few down.

So, for example, sports apparel brands, TVO always Gymshark, Milo dogs, streetwear, fashion brands, prohibited scuffers, 6pm Also makeup, as I just mentioned, or in the nutrition space. Also big on social esn, more nutrition, Miralina superstructure, you name it.

There are so many really good brands that leverage their communities to create a really loyal group of people that specifically come to their shop to buy. And I think this is also something really essential for what is coming. Now, you already mentioned it, like the whole part.

With AI commerce, you have to find ways to really tie your customers to your brand. Because there's just. Every product is exchangeable.

I know every brand thinks, oh, my product is the best, but from a customer point of view, it doesn't matter if I buy my sports leggings with Tibo or Gymshark or always. Essentially, to me, it's all the same. They're roughly the same price point. And I want my ass to look good in the gym. You know, that's.

That's what keeps. That's. That's what motivates me to buy. And why do I always buy TVO leggings? Because I feel as part of their community.

Yeah.

So I really think this is important.

If you have a product where you can build a community around, and this is my bold thesis, I think you can build a community around any product, then you should really try to tap into that and to accelerate that, you should use creators to find those people who could become part of your community.

Okay. Yeah.

So now I would like to turn this question on its head and ask if social networks like TikTok can compete with traditional marketplaces on the fulfillment side of things. And that's what we will talk about after another short break and a quick word on our new partner and sponsor, PixelModa.

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If you want to learn more about this, tune in next week because then we'll be talking to gianni Zarazzi, the CEO of PixelModa and yeah, we'd like to welcome you there. Yeah, let's turn the debate a bit to your main field of expertise, Christina, and which is logistics.

And TikTok has been attempting to catch up on this. They have fulfilled by TikTok and you just said, okay, this is really working quite well, the whole buying process, the whole fulfillment process.

So how is fulfilled by TikTok working?

So in Germany for now, they don't really have their own infrastructure like Amazon, so they don't have their own central warehouses, but they usually figure, as far as I know, as like a warehousing partner, which is essentially, it doesn't matter for the merchant which warehouse it is eventually. I think most of the brands that are active now on TikTok shop still use their own logistics because it's a lot of D2C brands.

So usually they either have their in house fulfillment or they have it outsourced to a company like Everstocks where I work at. And then we just create the integration with TikTok shop or right now it's not possible to integrate directly.

It's via Shopify and we are integrated with Shopify.

I think when you look at China there they have their own logistics infrastructure and I think if they gain traction here in Europe and also in the US and they see that everything works out, I think they will double down on that because it's going to be a nice additional revenue stream.

If you look at Amazon, FBA or in general also Amazon's Last Mile delivery services, you have such a competitive edge when you can open that infrastructure also to sellers who may not sell on your platform yet. So first of all it's a nice opener to get them into your ecosystem. So maybe they will, yeah, use your platform to sell their products later on.

And the second part is of course you just make money with it, so you're not too dependent on the commission you get on the sales, but you just have like a logistics arm. And I think they followed Amazon playbook in the west quite closely.

So this is why I think that it has a lot of potential in the future if they decide to Double down on TikTok shop here, which I think they will.

Yeah, they already did build their first logistics centers in the uk, I think.

Yeah, in the uk, yes, but in Germany.

No, not in Germany, but in uk, yeah. But as they are at the moment, how is, how important is it to TikTok that their brands are delivering fast?

Are they doubling down on the brands and on their standards, on their logistics standards? Is that even the topic when you are in. Yeah. In talks with TikTok?

Not really. Actually, I don't, I don't know what the customer preference is on delivery times.

I can only speak like from my experience or my friends or people that I talk to.

So usually it's like standard shipping times that you would expect, like the same shipping time as you have when you order via the shop directly, for example, because it's the same fulfillment source.

I was just wondering if the platform itself is pushing here, their sellers in any direction, like Amazon is doing, for example.

I think they probably have like a punishment somewhere in their terms and conditions.

So probably you have to be in a certain range of like, I don't know, five working days, and if you need seven, like many, many times, then it basically brings down your merchant score or something. I'm pretty sure that they have something like this, but I couldn't say it with 100% confidence because I simply don't know.

Okay, let's turn it around to the software providers behind, because you've been talking several times about the integrations with Shopify. So TikTok is working closely with Shopify. But I often wondered about this because basically TikTok shop is a direct attack on Shopify, isn't it?

Because if all those D2C brands that are mostly on Shopify are now selling the products directly over the TikTok Shop app, where does this leave Shopify?

That's a really good question. And I thought about this a lot. I think for Shopify, it's the only way because it's just a normal way of shopping now.

So you have to adapt your business model and the way you serve your customers accordingly. And I think if Shopify wouldn't do it, then another platform would do it.

So because Shopify is lacking the social part, or all of the shops are lacking the social experience, this entertainment experience that you have on TikTok, same with Amazon, which is why they then decided to integrate also with TikTok where you can directly, in the US you can directly check out via Amazon on TikTok without leaving the app because they also failed to provide a social experience on their own commerce platform platform. Same with Shopify. So I think for them it's. It's the only way to reduce friction in the customer journey.

So before, as you know, you saw posts and someone was wearing, I don't know, a nice blouse and you wanted to buy it.

And then you have to click on the creator profile and you have to click on the link tree and then link tree opens and they have like 100 products tagged because this is of course not their own post. You click on there, then you click through cookies and where's your location? Do you want to sign up for the newsletter?

So you already clicked already 13 times or something. And then if you're lucky, you even land on a product page and then it's sold out or something. So the experience is shit.

So I think they lost a lot of conversions there. So it just makes sense to shorten this time from buying impulse to checkout.

And I think Shopify is Really aware that they have to just play the game in order to stay competitive there.

I think we're a few years behind. So I think with southeast Asia Probably 10 years. With the US 5 years. I will go to China in October on an e commerce expedition.

After that I can tell you a bit more how far we're lacking behind China for example, we are far to be depressive.

I think I was like seven years ago in China and it was impressive and I thought they already we are like five to 10 years behind and they are even faster. So yeah, maybe it's even more than 10 years. I don't know. Yeah, I'm. Yeah, let's see what you will say after October.

Yeah, we have to do another check in episode. Yeah, I mean for them it's like in Southeast Asia it's completely normal to consume live streaming content, for example.

They really do it for leisure reasons. So for us it's I don't know, watching gitzet es on the couch on the tv. For them it's like watching a creator sell something.

I think it also has something to do with that. They basically skipped the desktop phase and like everything so mobile and every everything is so platform driven.

So I can only speak from what I research because I have not been there yet. But from what I've heard is that D2C shops basically don't exist. You buy everything on platforms.

So they are so used to this melting together of commerce and social and life for them it's yeah just it comes natural to them and we don't have that here. And I think especially Germans are always a bit cautious also about like their data and their consumption behavior.

And we are I think much more social. So we spend more time with our friends or interacting with our friends online and watching like a random person sell us something.

So I wouldn't even say say we're behind. It's just it was a different way of upbringing, so to say. But I think everything that's possible here is al there is also possible here.

I'm not the biggest fan of live shopping and I think this will take a lot, a lot of time. But even that there I would be bullish and say okay, I think this is a normal way of shopping in 10 years here.

Well, it has been no way of shopping here. It's just called, you know, hometown and has a very different kind of, I don't know, attitude to it. But there has been a legacy for that. So. As well.

Yeah.

Are we all going for, I know for foregoing agentic commerce because we do want to like to talk to real people and go for social commerce. Why are we there?

I think both will exist because it's different ways of shopping. So I would say that AI platforms are more intent driven.

So you have a need or a problem and then you type it into your whatever it's going to look like interface, let's say a browser and you say you're traveling to India and you're not sure what you need to buy for your trip and then you just put it in there and it basically tells you what to buy. And then like in a generic way and then you say okay, but which exact product should I buy?

And that in the price range, what the pros, what's the cons? So this really conversational shopping experience will exist in AI platforms versus this.

I get inspired and I get influenced and I don't even know that I need. It will take place in social commerce. So it's not really a question of either or. I think both will exist.

And I think you have, and this was one of my thesis at the kafunf, you really have to leverage your social presence in order to even make people want to buy your product to create that intent in their head. Because if you don't know about a brand or a product, you will never buy it. So I think one cannot exist without the other essentially.

But what I think is interesting, I'm not the most, how do you say, fantasy full person. So for me it's always hard to imagine abstract things.

But I talked to Jochen about this and he said maybe one day you will have like your interface, your browser or whatever and it knows exactly your style and what you like and it will just pull what you already like from also your social platforms. And then it's basically you will have your own shop within your AI interface.

So it's not really a thing of like going to TikTok to actually see what's there and what's cool. But the AI interface will already decide what you will like and then just push that into your own personally curated shop.

So this is also something that I think is likely to happen, actually depends on how open the social platforms will be towards AI platforms and which data they share. But yeah, this can also happen.

Where does this leave marketplaces of today? Do they have a place in this kind of future?

It depends. I see it very critically. So I think that Amazon launched a Buy for Me agent was a really good strategic move because.

And also that they invest in AI hardware and also software. So they really see what the future will look like and try to adapt to it.

Because if you're like a generic normal marketplace, what's your right to exist? Because essentially you're just a catalog then that the AI platforms pull their information from.

But I don't think that people in five years will go to Kaufland or Otto or Amazon and buy there, but instead do everything in ChatGPT or perplexity or whatever AI agent they use and say, I have this need, please find me the best price to value product in that category. And then I think they will buy through that.

So yeah, you really have to adapt in terms of you have to provide your own AI capabilities as a marketplace or otherwise you will just be some sort of like data center that the AI platforms suck on.

Right. Yeah, that was some interesting stuff to think about, I think, and just the right kind of depth for our summer deep dive.

So thank you for your insights into the world of social commerce and a bit of lookout as well. Christina, thank you.

Thank you for the invitation. It was really an honor to speak with you both. Marketplace legends.

It was really fun because I think we sat like half a year ago at lunch, we were like, yeah, let's do a podcast together and here we are. So yeah, I like your approach of like overall the combination of both worlds, the AI agents as well as the, yeah, social commerce.

So it's not an either or, it's like an add on to each other. And also I think the kind of customers, they are also different. Right.

And you have the ones who are more like, okay, I want like really to like need this and I don't want to spend so much time on like watching products, et cetera and the other ones. So thank you so much again, Christina. And if you like listening to us today, you could make us very happy by following us and rating our podcast.

On Spotify, Apple Podcast, YouTube or wherever you are listening to us and of course, by tuning in again next time when we talk about AI image generation for the fashion business. So speak to you soon.

Bye bye.

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Marketplace podcast with Ingrid Lommer and Valerie Dichtel.