Liz Young of The Wall Street Journal reports that the viral video platform, TikTok, has put together outsourced logistics operations as it intensifies its competition for U.S. sales. She writes:
TikTok, the viral video-sharing platform, is betting heavily on logistics as it tries to turn its outsize streaming audience into a big share of the U.S. e-commerce market.
The social-media app is setting up a network of warehouses and fulfillment operations, taking on nuts-and-bolts tasks such as managing inventory and delivery from the array of independent merchants that are selling goods to TikTok’s legions of followers.
The business owned by Beijing-based ByteDance is effectively borrowing a page from Amazon.com as it looks to compete directly with the e-commerce market leader through the burgeoning wing of online retail known as social commerce. The idea is that taking on the logistics, rather than relying on third-party sellers to handle their own fulfillment, will help attract more merchants to TikTok Shop and win over shoppers with fast, reliable delivery.
But TikTok is breaking from Amazon’s approach by outsourcing the logistics operations. The company is striking deals with logistics providers including ShipBob and Newegg to store inventory and pick, pack and ship online orders. Those companies will then drop the packages into private delivery networks for delivery. […]
Annie Leal of McAllen, Texas, has used TikTok to market her line of sugar-free Mexican condiments called I Love Chamoy. She joined TikTok Shop when it became available to select merchants in the U.S. earlier this year.
She recently started using ShipBob to fulfill orders placed through TikTok Shop, freeing up her time. Outsourcing fulfillment rather than handling it herself carries a cost, but Leal said it has been easier than some alternatives.
“Very briefly we considered, do we buy a warehouse ourselves? Do we hire employees to do this?” Leal said. But “I wanted to focus on the things that I feel very comfortable doing to scale, which is, I love the marketing, I love content creation. I love creating new products. Let me then look to the experts to do fulfillment.”
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