In an incredible move that could directly challenge American e-commerce giant Amazon, TikTok is pushing a plan to build product fulfillment centers across the US. The move, which will create a huge e-commerce supply chain, was revealed by the company’s job openings on LinkedIn weeks ago.
According to a report by Axios, the short-form video platform is committed to make e-commerce its next major revenue stream.
“By providing warehousing, delivery, and customer service returns, our mission is to help sellers improve their operational capability and efficiency, provide buyers a satisfying shopping experience and ensure fast and sustainable growth of TikTok Shop,” the company wrote in one job listing.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
In the past few years, TikTok has recorded unprecedented growth buoyed by youths’ patronage, and has seen its ads business skyrocket. The growth has created a vehicle for the social media company to establish subsidiaries globally, outside its core business.
TikTok’s move to go fully into e-commerce is not surprising given its attempts at shopping that it has done by partnering with other firms and creating its own shopping features.
The company began to pilot a shopping feature in the U.S., Canada and the U.K. last year via a deal with Shopify. It also launched a separate live shopping feature in the U.K. earlier this year but reportedly struggled to get creators on board.
TikTok’s plan is to build on the shopping feature to create its own e-commerce supply chain that could give it more control and boost profits in the U.S. and around the world.
Axios quoted TikTok as saying in its job postings that it is looking to build an “international e-commerce fulfillment system” that will include international warehousing, customs clearings and supply chain systems that support domestic e-commerce efforts in the U.S. and cross-border e-commerce efforts. The systems will eventually perform parcel consolidation, along with transporting goods from one stage to the next and managing free returns.
According to the job listing, one position, a logistics solutions manager for a global fulfillment center, is looking for a Seattle-based employee to plan and design fulfillment centers and e-commerce logistics solutions that include the transportation of goods, order prediction and inventory management.
Another Seattle-based role calls for the creation of a new fulfillment service center “from scratch.” The center, the posting says, “is a global team responsible for developing and growing our logistics solution” and will include product fulfillment by TikTok Shop to its sellers by “providing warehousing, delivery, and customer service returns.”
The advertised role is the development of fulfillment services for TikTok’s e-commerce logistics in the US, but other roles point to a team that will be responsible for a global logistics and warehousing network. This indicates the company’s plan to go global, beyond the US and Canada.
But Axios noted that for now, it does not appear that TikTok plans to build out its own transportation unit like Amazon. The job postings imply that TikTok would work with vendors to handle shipping, parcel consolidation and transportation.
“One job description for a fulfillment logistics manager implies that, like Amazon, TikTok is looking to develop a free return program,” the report noted.
A TikTok spokesperson quoted by Axios said that in areas like the U.K. and Southeast Asia, where the company now offers e-commerce programs, it aims to provide “a selection of merchants which offer a range of product options as well as delivery options,” adding that the company’s “focus” remains on its currently active e-commerce regions.
With the e-commerce plan, TikTok, which has become a threat to social media platforms such as Meta, is moving to challenge other tech companies like Google and Amazon that rely on intent-based search advertising to drive business on their shopping platforms. Using its multi-million user-base, TikTok’s influence in the global e-commerce industry will be massive.