TikTok's E-Commerce Ambition: A Misguided Strategy?
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The E-Commerce Push
Recently, the Wall Street Journal published an article titled, "TikTok Wants to Sell Made-in-China Goods to Americans." This piece highlights TikTok's initiative to establish an e-commerce platform in the U.S., aiming to compete with established shopping giants like Shein and Temu.
A key point from the article notes:
"TikTok is launching an e-commerce business in the U.S. to sell made-in-China goods to consumers, stepping up its rivalry with popular shopping platforms Shein and Temu."
TikTok's approach appears to mirror that of Amazon, as they work on creating a marketplace dubbed the TikTok Shop Shopping Center. This platform aims to combine various shopping channels into one cohesive experience for users.
The article further elaborates:
"TikTok's venture into this new e-commerce model is designed to broaden its seller ecosystem, generate more revenue from its widely-used video app, and reduce reliance on advertising sales. This strategy comes in response to the growing popularity of PDD Holdings' Temu and fast-fashion retailer Shein."
At first glance, this move may seem like a significant strategic error.
The Misalignment of Strategy and Market Needs
I firmly believe that the combination of TikTok's extensive user base and Temu's success are not compelling justifications for launching this new venture. The primary motive for initiating a business should always be the potential to deliver distinctive value to customers.
Consider Threads, which is losing active users daily; it fails to differentiate itself from existing social media platforms. Is there really a necessity for yet another "Amazon-like marketplace" in a saturated market?
Possessing substantial financial resources is not a valid reason to start a bank. This phenomenon can be categorized as an "asset-based strategy," which I consider inherently flawed. Merely having an asset—be it a factory, a customer base, or a product—does not guarantee that a viable strategy can be formulated around it.
True strategy revolves around fulfilling customer needs, not just leveraging existing assets.
What are your thoughts on this issue?
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