TikTok officially announced the fully managed model, which has become popular in the e-commerce industry! Sellers should pay attention and seize the opportunity!

TikTok announced a popular fully managed model in e-commerce Sellers should seize the opportunity

With the “full-service mode” brought abroad by Pinduoduo’s Temu brand last September, it seems to have invisibly guided a new revolution in the cross-border e-commerce industry. The market has begun to surge in the “full-service” trend, with many e-commerce giants following suit and launching it one after another. Following AliExpress, Lazada, and Shein, TikTok Shop has recently announced the official launch of the “full-service mode”, and thus all four “little dragons going abroad” have entered the new track.

Some friends may not be clear about what “full-service” means, so let me briefly introduce it.

The so-called “full-service mode” means that the merchant is “purely supplied,” only responsible for developing and reporting products, which is stocking and supplying, and the subsequent sales, operation promotion, logistics, performance, after-sales, and other links are all the responsibility of the platform. After the product is sold, the platform settles with the merchant according to the supply price. In this mode, the platform can fully leverage its operational advantages, and the supply chain-type sellers can also be at ease as “hands-off shopkeepers” for a win-win cooperation.

It is reported that TikTok Shop’s cross-border e-commerce full-service mode is currently only open for investment in the Saudi and UK markets, and may be launched in more markets later. Of course, TikTok’s e-commerce business is not one-size-fits-all. In addition to this full-service mode, consumers still have a semi-closed loop mode, and they can purchase products through links to external websites.

The advantages and disadvantages of the full-service mode for sellers

Why is the “full-service mode” favored by major cross-border e-commerce platforms? This is because the platform can effectively control the quality, quantity, pricing, inventory turnover, and transportation capacity of the products, standardize the e-commerce chain, and improve the consumer purchasing experience. This is a measure for the platform to enhance its competitiveness and to conform to the strategic way of attracting top sellers and supply chains under many variable market environments.

Practice makes perfect. For most factories and supply chain-based sellers in China, they understand products but not foreign languages and e-commerce operations. Their lack of knowledge about local culture and compliance requirements is also a barrier to going global. The platform’s launch of the “fully managed mode” is indeed an effective way to expand sales channels, reduce operational pressure, lower management costs, and efficiently establish transformation. It can even achieve “people on vacation, goods still being shipped,” which is a real win. Through cooperation with platforms such as TikTok, sellers can better understand target audiences and market demands and obtain more accurate user data analysis.

However, where there are advantages, there are also disadvantages. The convenience gained through “full management” may affect the seller’s autonomy and voice in operation. In the case where the platform is responsible for all traffic and product operations, once there are more platform suppliers to choose from, there will be a comparison between price and quality. Advantages or disadvantages will become more apparent. On the one hand, it may face price pressure, on the other hand, it may also be replaced.

You can refer to the style of “full management predecessor” Temu to know about this. After the launch of the “fully managed mode,” it will inevitably trigger more fierce price wars among sellers, and trade-based sellers will face greater challenges.

The positive impact of the fully managed mode on the industry as a whole

Firstly, for some factories and emerging brands, the introduction of the “fully managed mode” reduces the threshold and cost of entering the global market, enabling more factories and brands to quickly go global, expand sales channels and business scope, and more products enter the race. The entire cross-border e-commerce industry will usher in higher-speed development.

Secondly, the introduction of the “full-service model” will inevitably stimulate more competition and innovation, and in order to attract both consumers and suppliers to choose their own platforms, e-commerce platforms will continue to improve service quality, marketing strategies, and develop new features, which will further promote innovation and progress in the industry.

Moreover, by combining the platform’s traffic advantages with the merchant’s product advantages, merchants can use social interaction and other methods to more comprehensively understand user needs and shopping behavior. This not only helps to improve the user experience, but also enables manufacturers or brand owners to continuously improve product quality with direction, which has a positive impact on the entire industry.

In summary, TikTok Shop’s full-service business has opened up a new channel for cross-border sellers. In the early stage, the platform will launch various business guarantees. At this time, seizing the opportunity to grab the first-mover advantage can easily reap more benefits, which is a good opportunity for many novice sellers to enter the overseas market. However, with opportunities come challenges, and the platform will certainly have higher requirements for the cost-effectiveness of products. In the later stage, it is not impossible for the profits of trade-type merchants to be reduced to cost. Sellers can consider whether to join based on the actual situation.

If you are a seller who wants to discuss the operation of TikTok Shop, you are also welcome to communicate with us~

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