Why are 99% of T-Tok merchants losing money? Streamers, institutions and service providers say so

11-24 2022

"99% of people who do T-Tok e-commerce are losing money," more than one T-Tok e-commerce practitioner told the new list editorial board.

It has been observed that this year, T-Tok has significantly more players going to the sea to do e-commerce. On the one hand, because some live streaming e-commerce practitioners do not want to continue to fight in the domestic Red Sea market, they try to replicate the successful experience in China overseas; On the other hand, T-Tok's official actions are frequent, constantly releasing positive signals.

T-Tok first partnered with Walmart at the end of 2020 to test the water of live streaming, and officially launched T-Tok with similar functions to D-tone shop in 2021 Shop, and gradually open Indonesian station and British station small stores, which means that T-Tok e-commerce began to move towards a closed loop.

In 2022, T-Tok will first lower the threshold for small shops on T-Tok's UK station, and then continue to increase the number of small stores in Southeast Asia and Europe, opening small stores in Thailand, Vietnam, Malaysia and Singapore, and the news that the United States is about to open a closed loop will appear every once in a while.

According to media reports, T-Tok's e-commerce business has set a goal of $2 billion in transaction volume in 2022 and plans to reach $23 billion by 2023, and T-Tok e-commerce hopes to achieve the goal of entering the world's major mainstream markets in five years.

The ideal is full, but the reality is skinny.

Bringing goods on T-Tok, both streamers and institutions, face challenges in various aspects such as political economy, cultural differences, and regulations and policies. Why did they enter T-Tok, what "pits" did they step on, and how did they solve it? We spoke to T-Tok streamers, agencies and service providers.

"three mountains" that T-Tok live streaming needs to climb "

The competition in domestic live streaming e-commerce is too fierce, and I have been an anchor for a year and don't want to roll it anymore!"

Dora, located in Guangzhou, quit her job as a D audio tape anchor with a monthly salary of 2~30,000 yuan in 2021, when T-Tok e-commerce was just getting started, and the competition was much lower than in China.

Dora said: "My appearance is more European and American, I am also fluent in English, and I joined a cross-border e-commerce company last year to transform into a T-Tok anchor, although the salary is not as high as the D sound anchor, but the pressure is relatively small." "

Joanna, who turned English anchor from teacher to English anchor, joined a Chengdu-based T-Tok company earlier this year, admitting that the industry is not as profitable as the outside world thinks, most profitable companies mainly earn training, a large number of companies are losing money, "I am even worried that one day the industry will be gone."

It is understood that entry-level English anchors can generally get a basic salary of about 5000~6000 yuan in the southwest region, and the salary in the Yangtze River Delta and the Pearl River Delta is higher, which can reach about 8000~10000 yuan. It is difficult for newcomer anchors to get commissions, and slightly more experienced anchors get GMV commissions, and their salaries are more considerable.

Being able to speak a foreign language fluently and clearly is only one of the thresholds, and the cultural differences behind the language are the first major problems that streamers and organizations need to face.

Dora, who specializes in live streaming of women's clothing in the UK, will paste a note with a translation of live broadcast terminology in the live broadcast room to prevent getting stuck and forgetting words during the live broadcast, "language is not the most important, state and mentality are", how to face the single-digit online number of people in the live broadcast room, how to guide foreigners to place orders, what to do if they are attacked for no reason and racially discriminated, These are the problems that you will face when doing live streaming in English.

Streamers also need to know the cultural customs of the live broadcast area in advance, and should not mention words related to racial discrimination or offensive religious beliefs, such as Buddhism, Christianity and Islam have their own taboos, and the slightest mistake can lead to banning.

Cultural differences not only affect the host's speech, but even play a decisive role in the selection of products. Combined with foreign history and cultural background layout products, there is a chance to make explosive products born.

For example, in Western culture, crystal stones have divination, transport and healing functions, and on T-Tok, "crystals" videos have reached 6.2 billion views. Foreign netizens have the consumption habit of buying crystals, so crystals are one of the explosive products of cross-border e-commerce in Europe and the United States. Similarly, the recently best-selling magic wand has also been influenced by Harry Potter and other IPs, triggering "wild consumption" by netizens.

It has been observed that the first-line luxury group has not yet "embraced" T-Tok live streaming goods.

Many T-Tok practitioners believe that many international big brands are still very reluctant to participate in T-Tok live sales. On domestic e-commerce platforms, you can see brands such as L'Oreal, Estée Lauder and Gucci appear in the live broadcast room, and brand self-broadcasting is also booming, but it is difficult to see their shadows on T-Tok.

Looking back at the development process of domestic live streaming e-commerce, super anchors frequently create amazing sales, and users gradually form the consumption habit of buying things in the live broadcast room.

On the other hand, T-Tok has neither benchmark anchors such as Li Jiaqi and Luo Yonghao emerged, nor has it formed an atmosphere of large-scale users rushing to buy goods in the live broadcast room.

After T-Tok orders, logistics is the second mountain to climb.

Mr. R, the founder of T-Tok e-commerce company in Shanghai, told the editorial board of Xinbang that merchants must first send goods to a transit station, replace them with another express bill, and then transport them overseas from the transfer station.

There are often oolong incidents in the freight settlement link, such as logistics companies writing the decimal point of the weight of goods incorrectly, 15.5 kg of goods have to pay 155 kg of freight, and in the end lose money to sell the goods. Faced with this situation, merchants "have no way to complain" and can only eat "dumb losses".

Affected by the global epidemic, international logistics flights are often canceled, resulting in longer logistics cycles, and the delivery time of goods is often delayed from one week to half a month. Dora mentioned, "Users do not have the patience to wait and refund directly, sometimes even if they are not satisfied with the goods, we basically refund and do not return, because the return shipping fee is even higher than the cost of the goods."

Foreign netizens who specialize in "weeping" seize the weakness of high logistics costs of cross-border merchants and carry out "fraudulent orders".

Dora shared a more extreme case: she found that two accounts placed orders for 10 XL codes and 10 S codes for the same clothes, and the delivery address was exactly the same, and finally found that behind the two accounts was the same person, the other party used a picture opposite to the order size to complain that the merchant sent the wrong goods, and after applying for a refund, she "set" 20 pieces of clothes empty-handed.

Mr. R said that in order to deal with such situations, you can take photos of the shipment in advance and keep them, and if there is no photo evidence, it is difficult to win the case in the platform arbitration.

In addition to cultural differences and logistical issues, legal policies and the international situation have also added uncertainty to T-Tok e-commerce.

The core of D sound "interest e-commerce" is algorithm recommendation, and more accurate recommendations can be made after having enough user behavior data, but T-Tok is difficult to have the same amount of data "feeding" algorithm in the short term, so the sales conversion effect of e-commerce is not satisfactory.

An agency founder who has been engaged in cross-border e-commerce for more than ten years said bluntly: "T-Tok traffic is really large, and the conversion is really poor. "

He believes that domestic users have almost no privacy in front of the App, and today he said what he wants to buy, and when he swipes his phone again, he will see related products almost immediately. Foreign laws and regulations on user data are stricter, and it is difficult for T-Tok to collect data on the same scale as D sound.

In July 2020, the Korea Communications Commission fined T-Tok 186 million won (US$155,000) for collecting data on children under the age of 14 without parental consent.

In August 2020, Trump issued two consecutive executive orders to ban ByteDance on the grounds of "national security".

In April 2021, T-Tok was accused in the UK of illegally processing the information of millions of children, breaching UK and EU data protection laws.

Looking through the news, it's not hard to see the pressure T-Tok is facing. A number of industry insiders revealed that the closed loop of e-commerce in the United States has not been opened, and it has a lot to do with international relations, and once the United States is opened, T-Tok's e-commerce performance will increase exponentially.

Mr. R said: "All that needs to be done now is to wait for the opportunity to come. "

T-Tok service provider experience: banning, demoting rights and uncooperative overseas talent

It's not just anchors and institutions that go overseas.

Where there is business, there is a service provider.

T-Tok has hundreds of millions of DAUs in hundreds of countries, and Iris, founding partner of Flow Apeworld, told the editorial board that this is the main reason they are targeting T-Tok services.

Iris the official certified service provider of T-Tok, said that before establishing the company in July last year, they spent nearly three months conducting market research and analysis on T-Tok, and only after determining that the platform had room for growth did they move the track, from the past domestic celebrity and talent business to T-Tok brand services and talent incubation.

Several company founders from leading MCN institutions and e-commerce platforms: Worry-free Media, Make a Friend, Daily Fresh, etc., they brought the e-commerce experience of the original company to the traffic of the Ape Globe, and it took less than a month to form the entire team.

Excluding the cost of the venue, their main expenses are talent recruitment and live broadcast equipment, which cost hundreds of thousands.

Iris revealed that they pay live streamers between 1,000 and 1,500 yuan an hour, which is a big expense.

Her requirements for experts are mainly divided into three points: first, English pronunciation should be standard; Second, the appearance image and temperament need to conform to the tonality of the brand, for example, a clothing brand they have served requires clean, sunny and atmospheric anchors to recommend products; Third, it is best to bring some talent.

According to reports, in the past year since starting a business, their revenue and expenditure have been exactly equal, and they have not been able to achieve positive revenue growth.

"It's a very small percentage of money that can be made at this stage, and it's safe to say that the gross profit is not as high as everyone thinks. The vast majority of players may be in a break-even or even loss-making state. Iris said.

Educate users that the market is cyclical, that's Iris's view.

Can T-Tok replicate the success of D tones? Probably, but not now.

She suggested that if you want to enter T-Tok's brand "content first", that is, first set up the account matrix, and then do the undertaking and conversion of the live broadcast room after having a certain number of fans, relatively speaking, this operation is easier to save costs.

She said: "Many brands on my side (contacted), they really spent a lot of money to find institutions outside to do training, but there was no result after the training, in fact, many things as long as you operate it yourself, some general logic and thoughts are already there, there is no need to spend some unjustified money, many institutions are eating poor information (dividends)." "

Lydia, T-Tok operation manager of Blue Ocean Media Group, mentioned: "T-Tok is still a blue ocean market, and there are many people who want to monetize through such a huge traffic pool, but I believe that the number of people with content capabilities will not exceed 10%. "

She talked about that many so-called players in the industry were making short-term income by transporting domestic explosive videos in the early days, and their accounts will definitely be demoted after the T-Tok copyright protection mechanism is improved. Only by starting from content and creating a strong IP account will it have long-term business value.

Blue Ocean Media Group, official certified partner of Google, YouTube, Facebook, Greater China. It not only incubates and serves creators, but also helps brands go overseas and government international communication, with more than 1,000 co-creators and more than 100 million overseas subscribers. "Office Ono", which has more than 20 million overseas fans, comes from their organization.

In 2021, following the rising traffic to T-Tok, the team began distributing content from "Office Ono" and other bloggers to T-Tok.

Blue Ocean Media Group's brand services are more inclined to the Southeast Asian market, that is, the model of low unit price, low gross profit and low investment. Their main products include wearing armor, wigs and other small items, and they are sold to low-income people in Southeast Asia who have a lot of time to use short video platforms.

According to reports, the purchase cost of wearing armor is about five yuan, plus the cost of logistics, the cost is about ten yuan, that is, less than two dollars, but the price can be marked to 15-19 US dollars, and the profit of a wearing armor exceeds 10 US dollars.

"We actually recommend that smaller businesses try to play T-Tok, because T-Tok is not as expensive to operate, but it gets a huge amount of traffic." Lydia said.

To this end, Lydia also gives several practical suggestions for T-Tok going overseas:

1. Platform demotion rules.

T-Tok It is the same as many other platforms, and it is necessary to raise the number in the early stage and let the new account simulate user behavior, so that it will not be caught as a "junk account" by the system algorithm and demoted.

Scientific Internet T-Tok has high requirements for the environment, if the IP address of the account is more erratic, or the gateway to the Internet (the "gateway" of different network connections) is not completely imitating the overseas environment, then the account may also be demoted.

2. Copyright issues.

At that time, when we were doing the early account construction, we were not familiar with the copyright retrieval mechanism of T-Tok, so we directly released the video after the end of the maintenance period, and then the system detected that our music had infringement problems, resulting in some of our videos being demoted by the algorithm, and finally we could only be forced to give up the entire account and run the process of raising the number from scratch.

T-Tok's music library is global, so its retrieval mechanism will be stronger than D-sound.

3. Brand selection.

Products priced at $10-20 per unit are the most popular, and we recommend newbies to start with products at this price range.

4. Talent cooperation.

When we promote cooperation between overseas KOLs and domestic brands, we will encounter more problems than cooperation with domestic influencers. Some overseas KOLs cherish their fans and are more willing to maintain their reputation than the leek-cutting monetization in China. They are reluctant to recommend some things that do not have a sense of identity, so their willingness to cooperate and communicate is not as strong as that of domestic KOLs.

If he gives us feedback that he feels inappropriate and does not recommend, we will combine his audience user portraits, including some pendant brands mentioned in his own daily videos, and then make accurate product recommendations.

Compared with the Southeast Asian market, the traffic of the orangutan ball is more targeted at the United States, the United Kingdom and the European market, relatively speaking, the domestic brands in these markets are more mature, and also have a larger enterprise volume, for these companies, how much money can be earned by a live broadcast is not the most important, the important thing is to "occupy a pit" overseas in the early stage of T-Tok. Promote the brand concept early and expand the brand influence.

Sensor Tower data shows that in July 2022, D tone and overseas version of T-Tok were released in the global App Store and Google Play attracted more than $290 million, 1.7 times more than the same period last year, and topped the global mobile app (non-game) revenue list. Of this, about 16.2% of the revenue comes from the US market.

Today's T-Tok players can be as short as a few months or as long as 1-2 years, and this app, born in 2017, has ushered in China's menacing entrants in its third year of growth. After all, this is a content market with more than 1 billion monthly active users, and who doesn't want a piece of the action?

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