Cross-border Hotspot Another New Move! TikTok Shop Launches Fully Managed Operation Mode?
TikTok Shop launches fully managed operation mode as new cross-border move
Recently, TikTok Shop officially announced the launch of the “fully-managed” operating model, which is currently open for investment in the Saudi and UK markets, and more markets are expected to be launched soon. What is the “fully-managed” model? Why is TikTok Shop introducing this operating model? What are the impacts for small shop sellers? Let’s take a closer look together!
What is the “fully-managed” model?
The “fully-managed” model, in simple terms, is when the merchant gives their products to the platform, and the platform is responsible for selling them. The seller only needs to provide the goods. In a sense, the seller becomes a supplier, while operations, logistics, fulfillment, and after-sales services are all handled by the platform.
The advantage of the “fully-managed” model is that it can reduce learning and operating costs, as well as storage and logistics costs. In addition, the payment speed will be faster, which can reduce financial pressure to some extent.
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However, for sellers without sources of goods or those who use drop-shipping, this is a big problem, as it basically means they cannot continue to operate on the platform.
Why introduce the “fully-managed” model?
To ensure platform security: Overseas markets have strict regulations for platforms, especially considering that TikTok itself is under scrutiny. However, the behavior of third-party sellers is actually uncontrollable.
Although most sellers operate legitimately, there are a few who sell counterfeit and substandard products for higher profits, which can actually affect the security of the platform itself. Under the “fully-managed” model, the platform can control the quality of products, logistics, and user experience to the greatest extent possible.
Positive market feedback: In fact, TikTok is not the first platform to launch a “fully managed” model. Overseas e-commerce platforms such as Pinduoduo Temu, AliExpress, Lazada, and Shopee have also successively launched the “fully managed” model.
Currently, this model has received good market feedback. For example, AliExpress’s official data shows that in March, its order volume increased by 50% year-on-year, reaching a record high. Therefore, launching this model actually meets the business growth needs of TikTok.
How should TikTok Shop sellers respond?
Currently, TikTok Shop is only recruiting merchants in the UK and Saudi Arabia markets, while sellers in Southeast Asia and other regions can continue to operate through the platform model. However, sellers also need to be mentally prepared. If the market performs well, the “fully managed” model will probably be launched in various markets one after another.
For sellers with supply chain advantages or those who are integrated with manufacturing and trade, they can actively try it out. But if the seller has no inventory or their advantages are not that obvious, they may need to plan ahead.
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