Week #8: TikTok Shop Rules Social Shopping, Bagging Over 68% of Total GMV | De Minimis Packages from Temu & Shein will Face Strict Scrutiny in U.S.
Latest news and analysis on China’s global e-sellers
Here’s our pick for last week’s news:
Tokopedia and TikTok Shop Complete Back-End Integrations
AliExpress Launches Billion-Dollar Global Expansion Subsidy, Seeking for Top Amazon and Tmall Sellers
De Minimis Packages from Temu & Shein will Face Strict Scrutiny in U.S.
China's E-commerce Takes Over Global Market
Temu's Half-Managed Consignment Model Landed in UK
TikTok Shop Rules Social Shopping, Bagging Over 68% of Total GMV
TikTok's Owner ByteDance Denies 60% Profit Growth in 2023
Fashion Brand Peacebird Acquires ChicPoint to Expand the Middle East Market
Alibaba's Rocket Delivery Aims for 1-Hour Global Reach
Tokopedia and TikTok Shop Complete Back-End Integrations
TikTok Shop and Tokopedia have finished integrating their systems as per merger requirements, said Melissa Siska Juminto, president of ecommerce at GoTo Group. The integration, which resulted in the Shop | Tokopedia brand, was completed as of March 27.
“All e-commerce activities on Shop | Tokopedia, including payments, ordering activities, and transactions are now being entirely carried out on Tokopedia’s electronic systems,” said Juminto in a statement shared with Tech in Asia.
Last October, the Indonesian government banned e-commerce transactions on social media platforms such as TikTok and Facebook. TikTok shop then stopped running following the ban.
AliExpress Launches Billion-Dollar Global Expansion Subsidy, Seeking for Top Amazon and Tmall Sellers
AliExpress, Alibaba Group's global retail online marketplace, will provide extra subsidies to entice more Chinese brands and merchants to sell overseas, as the e-commerce giant moves to fend off growing competition from PDD Holdings' Temu and fast-fashion retailer Shein.
The campaign named "Billion-Dollar Subsidy" will be initially available to 1,000 Chinese brands and merchants, including those who have already opened a store on Amazon or Alibaba's domestic retail platform Tmall. Through this campaign, the vendors will also be able to sell their goods via one click on Alibaba's other international e-commerce channels including Lazada in Southeast Asia, Miravia in Spain, Trendyol in Turkey and Daraz in South Asia. Besides, extra traffic would be given to boost brand exposure and special delivery services via Alibaba logistic unit Cainiao Smart would be offered to ensure fast and smooth delivery.
De Minimis Packages from Temu & Shein will Face Strict Scrutiny in U.S.
A June 2023 report by the House Select Committee found that fast fashion Shein and low-cost online retailer Temu alone accounted for more than 30% of all packages shipped to the U.S. daily under the de minimis exemption.
Under the de minimis rule of current U.S. law, most imports valued at less than $800 enter duty-free into the United States as long as they are packaged and addressed to individual buyers. Efforts to lower the threshold amount or exclude certain countries altogether from duty-free treatment are set to become a major trade fight in this Congress.
U.S. Lawmakers are questioning whether the rule allows manufacturers to avoid tariffs and bypass laws barring the imports of products made by forced labor, illicit drugs or unsafe materials. "The de minimis loophole is a threat to American competitiveness, consumer safety and basic human rights," Blumenauer, top Democrat on the House Ways and Means trade subcommittee, said in last December.
China's E-commerce Takes Over Global Market
According to a study by U.S. research firm Sensor Tower, Singapore-based Sea's Shopee topped Amazon in the U.S. in terms of the world's monthly active users of e-commerce apps in January. It is noteworthy that Shopee's largest shareholder is China's Tencent, with a 20.08% stake.
Chinese e-commerce APPs are clearly making their marks. As of January this year, seven of the top 10 global shopping APPs -- Shopee (1st, with Chinese investment), Temu (4th), SHEIN (5th), Lazada (7th, with Chinese investment), Taobao (8th), AliExpress (9th), and Xiaohongshu (10th) -- were Chinese-owned or invested by Chinese capitals, accounting for 26% of the world market share, a 5% growth from 2021.
Leveraging domestic low-cost supply chains and diverse product lines, Chinese e-commerce platforms efficiently cater to consumer needs. China's Temu ranks 4th globally and offers services in over 50 countries just 18 months after its launch, ranking second in the U.S. and first in France, Germany, and the UK. Shein, widespread among the younger generations in North America and Europe, ranks 5th globally with its monthly average active users more than doubled since 2021.
Temu's Half-Managed Consignment Model Landed in UK
Temu's new half-managed consignment model landed in the UK recently, the first stop in Europe after its launch in U.S and Canada last month. This half consignment model allows those merchants with goods outside China to process orders and arrange for fulfilment by themselves. To be more specific:
– Merchants will be in charge of: warehouse management, delivery, and reverse logistics (returns etc.)
– The platform will provide: flexible delivery options, including order stacking
Compared to Temu's full-managed consignment model (where manufacturers agree on a price to supply goods to Temu, and the platform does all the rest from marketing, operations, fulfilment to customer service), this new model will increase customer satisfaction through faster delivery and alleviate merchants' pressure in marketing and customer service.
TikTok Shop Rules Social Shopping, Bagging Over 68% of Total GMV
Social commerce is changing the landscape of ecommerce, and TikTok is at the center of it all. TikTok combines entertainment, community, education, and shopping in its platform. For small businesses, TikTok, specifically the platform's ecommerce solution TikTok Shop, can serve as a beneficial sales or marketing channel.
In 2023, an estimated 37% of TikTok users in the US—55.5 million—made purchases either through links on the app or directly on the platform. It is expected that this will increase by 67% by 2026, with US TikTok social shoppers reaching 39.5 million.
According to Earnest's report, as of February, TikTok Shop sold over 68% of social shopping GMV. In contrast, Instagram Checkout, Facebook Shop and Flip App sold less than 1% of GMV altogether.
TikTok's Owner ByteDance Denies 60% Profit Growth in 2023
ByteDance has denied a news report saying the company's profits surged by about 60% to over $40 billion in 2023. As a private company, ByteDance is not obliged to disclose its financial conditions, but such data were closely sought-after by investors, who regard the fiscal health of China's largest unicorn as a bellwether of the performance of the country's e-commerce industry.
The rumors reflect the market's high expectations for the company's performance. While much of this optimism could be attributed to TikTok's triumphant expansion overseas, and its continual refinement of advertising and other business models, the company's public denial of these rumors signals a cautious stance towards overly positive forecasts from external sources.
As a pivotal player in the digital content and technology domain, ByteDance's profit fluctuations serves as an example and holds predictive value for the whole digital industry.
Fashion Brand Peacebird Acquires ChicPoint to Expand the Middle East Market
Peacebird, a leading fashion brand in China, has constantly triggered new waves in overseas markets. The firm made its first overseas appearance in partnership with Tmall Global during the New York Fashion Week in February 2018. And shortly after that, in late September, Peacebird debuted its latest designs in Paris, where it presented a fashion show that broke through the boundaries of cultural domains and integrated the latest trends in youth fashion in the name of "Chinese Design".
Peacebird acquired Milan-based streetwear and skatewear brand Coppollela in 2020. This year, the company acquired the ChicPoint to target the Middle East market. ChicPoint is a China-based B2C e-commerce platform that offers a wide range of budget friendly household items and clothing for children and women in the Middle East and North Africa region. Founded in 2019, ChicPoint APP has been downloaded by almost 20 million times.
Alibaba's Rocket Delivery Aims for 1-Hour Global Reach
Chinese e-commerce giant Alibaba is joining forces with a rocket maker startup Space Epoch to test rocket-powered parcel delivery, aiming to send parcels anywhere in the globe within an hour. "Many great endeavours seem like a joke at first." said Alibaba-owned marketplace Taobao when confirmed the collaboration.
The project is planning to use reusable rockets for parcel delivery and aims to have each projectile carry a 120 cubic meter container holding up to ten tons of goods. The Beijing-based startup said it will conduct its first rocket delivery test soon, while the company acknowledged the difficulties involved in achieving the goal.
Alibaba isn't new to pushing the boundaries of delivery services. With its recent expansion of the "five-day delivery" service to main markets, Alibaba continues to refine its logistics capabilities. This rocket delivery initiative further demonstrates its commitment to innovation in face of fierce competition, both domestically and internationally.