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TikTok looks to tech startups to jump-start e-commerce business

Report: Struggling business marred by staff burnout, shipping delays, brands walking

TikTok is turning to startups like ChannelEngine and TalkShopLive to boost its struggling e-commerce business (Photo: Shutterstock)

The news of TikTok’s U.S. launch of TikTok Shop got many in the logistics industry excited by the prospect of a new powerhouse that could shake up the country’s e-commerce fulfillment space. 

But maybe we should slow our roll.

According to a report by the Financial Times on Sunday, TikTok’s e-commerce business is struggling, and the company is now turning to other technology firms for help.

TikTok parent company Bytedance also owns Douyin, the social media platform’s Chinese counterpart, which recorded a 300% increase in sales in the 12 months leading up to this past May.

But TikTok’s e-commerce business, the Financial Times reports, has been marred by staff burnout, shipping delays, counterfeit products and brands leaving the platform due to a lack of sales.

That has led the company to enlist the help of startups like marketplace management platform ChannelEngine and logistics service provider YunExpress.

The collaboration with ChannelEngine in particular could help TikTok get more brands on its platform. According to the Financial Times, several retailers and brands said they ended partnerships with TikTok because the technology was too difficult to use. ChannelEngine’s specialty, though, is making it easy for brands to list on marketplaces like TikTok Shop.

Watch: TikTok jumps into shopping?

YunExpress, meanwhile, could give the company’s budding fulfillment operations a boost. Last month, TikTok posted several job listings searching for people for fulfillment roles to build an “international e-commerce fulfillment system.” As a cross-border e-commerce logistics service provider, China-based YunExpress can help deliver orders to TikTok’s U.S. network.

The social media giant also partnered with TalkShopLive, the live shopping platform providing the core technology for its new live shopping feature in North America. The partnerships signal a renewed push toward a new revenue stream amid the company’s slashing of its global revenue targets for 2022.

To succeed in the U.S. e-commerce market, TikTok could take some lessons from its operations in the U.K. In London, employee burnout has reportedly resulted in a mass staff exodus. And per the Financial Times, the company’s U.K. office received around 200 new customer complaints each day over the summer, mainly relating to shipping issues.

The platform could also look to some of its new U.S. rivals for inspiration. Meta Platforms’ Facebook has long touted its Marketplace and Shops offerings, which facilitate transactions between billions of buyers and sellers. The offering includes shipping options for local orders through third-party delivery providers.

Instagram, the other major social media property owned by Meta, has introduced its own shopping feature in recent years, though it hasn’t been nearly as successful as its counterpart. Other platforms like Twitter and YouTube have also dipped their toes in the e-commerce waters, but they’re still in the shallow end.

TikTok did not immediately respond to Modern Shipper’s request for comment.

Click for more Modern Shipper articles by Jack Daleo.

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Jack Daleo

Jack is a staff writer for FreightWaves and Modern Shipper covering topics like last mile delivery and e-commerce fulfillment. He studied at Northwestern University, majoring in journalism with a certificate in integrated marketing communications. Previously, Jack has written for Backpacker Magazine and enjoys travel, the outdoors, and all things basketball.