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Live commerce takes the fun of instant purchasing and couples it with the social aspect of audience participation through a chat function or reaction buttons. In China, live commerce has transformed the retail industry and solidified itself as one of the most sought-after sales channels in under five years. In a 2020 survey from McKinsey, two-thirds of Chinese consumers said they had bought products via live stream in the past year.
The research company notes that China’s interest in live commerce indicates that live-commerce-initiated sales could account for as much as 10 to 20 percent of all eCommerce by 2026. But the shopping experience has yet to make the same splash elsewhere.
The Financial Times reports that TikTok has dropped plans to expand its live eCommerce “TikTok Shop” initiative to the United States and additional parts of Europe. The company began initial testing of the TikTok Shop in the U.K. last year. This marked the company’s first market outside Asia, allowing companies and influencers to sell products through live streams. But a few issues have plagued the project. The live commerce platform did not gain enough consumer traction and struggled with internal problems.
The platform had initially planned to launch TikTok Shop in Germany, France, Italy, and Spain in the first half of this year and then in the U.S. in the latter half of 2022. But it appears they may have bitten off more than they could chew.
According to PR Week, other spokespeople familiar with the matter claimed that TikTok had never planned to launch in Europe in the first half of 2022. Its focus was primarily on the U.K. after recently launching in Thailand, Malaysia, Singapore, Philippines and Vietnam, and last year in Indonesia.
“We are always looking at ways to enhance our community’s experience and regularly test new features that inspire creativity, bring joy and innovate the TikTok experience in markets around the world,” the spokesperson said. “Brands on TikTok have found a creative outlet to connect with audiences authentically, and we’re excited to experiment with new commerce opportunities that enable our community to discover and engage with what they love.”
Although international expansion is on TikTok’s agenda, many parameters for a European launch haven’t even been fulfilled. Macroeconomic considerations, the local merchant landscape, and the availability of a talent pool to deliver the service.
Speaking of the talent pool, many influencers dropped out of the project in the U.K. before it even attempted to gain traction. A TikTok employee also told the Financial Times that general consumer awareness and adoption are still low in the U.K., as many TikTok Shop livestreams achieved poor sales despite encouraging brands and influencers to sell through the app.
Overall, the project seems a bit messy. Huge budgets have been allotted to marketing teams to promote the events with media messaging and influencers, yet not even the power of the almighty influencer is getting European or U.S. markets excited about live stream shopping. Not to mention the conflicting reports about what the plans are for expansion. We’ll keep an eye out if this comes to fruition.