- TikTok Shop is a new feature of TikTok developed similarly to other e-commerce platforms, officially launched in 2022, allowing merchants and creators to showcase and sell products thr
Trang 1MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS AND FINANCE
FINAL REPORT
Subject: Supply Chain Management in E-Commerce
Course code: EBU1135E
Class code: B02E Instructor: Master Nguyen Ba Le
Trang 2MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS AND FINANCE
FINAL REPORT
Subject: Supply Chain Management in E-Commerce
Course code: EBU1135E
Class code: B02E Instructor: Master Nguyen Ba Le
Trang 3Nguyễn Hoàng Hải Đường 215121057
Nguyễn Võ Nhật Khoa 215121428
GROUP: 04
TOPIC: Present the understanding about the supply chain management of the TikTokShop in VietNam
Trang 4I.Introduction about TikTok Shop 5
II.E-SCM 5
1.Strategy of this company for their supply chain 5
2.Planning 6
2.1 Enhancing Livestreaming and Short-Form Commerce: 6
2.2 Strengthening Affiliate Marketing: 6
2.3 Global Expansion and Localization: 6
2.4 Logistics and Fulfillment Optimization: 6
2.5 Building a Robust Community: 6
3.Procurement 6
3.1 Sourcing products for your TikTok Shop: 6
3.2 Influencer/creator partnerships for TikTok Shop: 7
4.Logistics 7
5.Operation 8
6 WAREHOUSE AND DISTRIBUTION 11
III Challenges 11
IV.Recommendation and conclusion 12
V Reference 13
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I.Introduction about TikTok Shop.
- TikTok Shop is a new feature of TikTok developed similarly to other e-commerce platforms, officially launched in 2022, allowing merchants and creators to showcase and sell products through in-feed videos, LIVESTREAMS, and product display pages
- There are 4 main users:
• Sellers
• Creators
• Partners
• Affiliates
- Many brands use TikTok influencers in their marketing campaigns, sending products to people with a large number of followers and asking them to promote their products Instead of creating a shopping mall where customers can actively search for products they are in need of and then order, on TikTok the demand for purchases will arise through videos or live streams of Content Creators =>Creating success for TikTokShop
- After just 6 months since its launch, TikTokShop has secured the second position on the Vietnamese e-commerce platform, achieving a revenue of 16.3 trillion VND and selling
117 million products
• TikTok users are interested in buying from TikTok LIVE because they get to see the product clearly, easily attracted by the emotions of the live streamer
• Users are more likely to immediately buy something that they discovered on the platform in comparison to other platform users. II. E-SCM
II.E-SCM
1.Strategy of this company for their supply chain.
The business model of TikTokShop operates on both C2C (Consumer to Consumer acting as an intermediary between individuals) and B2C (Business to Consumer -facilitating transactions between businesses and individuals) TikTokShop seamlessly combines these two business scales, maintaining its intermediary role in both, resulting
in high efficiency
- The TikTok Supply Chain ingests and analyzes demand data from social media and various digital platforms with the aim of:
• Enabling real-time re-planning: This involves the ability to adjust production and logistics plans immediately to address sudden changes in demand, especially during the rapid spread of a trend or message online
• Embed responsiveness into operations: They integrate flexible responsiveness into their transportation and production processes, allowing for quick adaptation to market demand fluctuations
- Their Supply chain narrative: Utilizing digital platforms, they share information about how they manage their supply chain, Assist buyers and sellers in easily tracking their order schedules
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2.Planning
2.1 Enhancing Livestreaming and Short-Form Commerce:
- Livestreaming features: New tools and functionalities to make lives more engaging and interactive, like co-streaming, AR/VR integrations, and improved product showcases
- Short-form video integration: Deeper integration of product links and calls to action within short-form videos, blurring the lines between entertainment and shopping
- Livestreaming collaborations: Expanding creator and influencer partnerships to drive product discovery and sales through live demonstrations and endorsements
2.2 Strengthening Affiliate Marketing:
- Refined affiliate plans: More flexible and targeted commission structures, enabling brands to better incentivize creators and optimize campaigns
- Improved creator discovery tools: Simplifying the process for brands to find suitable affiliate partners based on niche, audience demographics, and performance metrics
- Performance tracking and analytics: Robust data insights for brands to measure the effectiveness of their affiliate marketing efforts and optimize ROI
2.3 Global Expansion and Localization:
- Entering new markets: Expanding TikTok Shop's reach to untapped regions with tailored marketing strategies and localized content
- Multilingual support: Enhancing language support for product descriptions, live streams, and customer service to cater to diverse audiences
- Cultural adaptations: Adjusting marketing visuals and messaging to resonate with local preferences and customs
2.4 Logistics and Fulfillment Optimization:
- Partnerships with established players: Collaborating with reliable logistics providers
to ensure efficient delivery and minimize customer complaints
- Warehousing and inventory management tools: Offering sellers tools to optimize inventory levels and streamline fulfillment processes
- Cross-border trade solutions: Enabling seamless international transactions and deliveries for both buyers and sellers
2.5 Building a Robust Community:
- Interactive features: Fostering community engagement through features like live chat, Q&A sessions, and product reviews within the TikTok Shop platform
- Loyalty programs: Implementing reward programs and incentives to encourage repeat purchases and build customer loyalty
3.Procurement
3.1 Sourcing products for your TikTok Shop:
- If you're a seller on TikTok Shop, "procurement" could refer to the process of finding
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and acquiring products to sell on your shop This includes activities like:
Finding suppliers: Researching and contacting manufacturers, wholesalers, or dropshipping companies to source your products
Negotiating prices and terms: Getting the best deals possible on your products while ensuring quality and consistency
Managing inventory: Ordering and stocking the right amount of product to meet demand without overspending
- There are specific features within TikTok Shop to help with procurement, such as: Product Catalog: This allows you to upload product information and manage your inventory within the app
Supplier Marketplace: This connects sellers with potential suppliers directly on the platform
3.2 Influencer/creator partnerships for TikTok Shop:
- If you're not a seller but interested in promoting products on TikTok, "procurement" could refer to the process of finding and partnering with influencers or creators to sell products through your TikTok Shop This involves:
Identifying relevant influencers: Finding creators who align with your brand and target audience
Negotiating partnerships: Discussing compensation and campaign details with the influencers
Providing product information and assets: Making sure the influencers have everything they need to promote your products effectively
- TikTok Shop offers tools to facilitate influencer partnerships, such as:
Creator Marketplace: This connects brands with potential creators for collaboration
Live Stream Collaborations: Brands and creators can co-host live shopping streams to reach a wider audience
4.Logistics
- Seller: A business or individual seller who has registered for a TikTok Shop account and posted products for sale with photos and descriptions similar to what they do with Shopee
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- TikTok Shop: Distributes seller videos to TikTok users, charging a 2.5% floor fee to TikTok Shop Vietnam on each successful order
- Customers: Users will watch videos that TikTok distributes, click on products pinned
in the video and make purchasing decisions Buyers can choose to pay in advance or pay upon receipt
- Shipping unit: TikTok Shop's shipping partner will pick up goods at the seller's warehouse and deliver them to the buyer, similar to Shopee
- Use partner warehouses:
- TikTokShop simply transfers orders from buyers to sellers The seller will be responsible for shipping the goods to the customer This model applies to bulky goods with special requirements for installation, products with a short shelf life
- TikTokShop shipping units: J&T Express, Ninja Van, GHTK,
5.Operation
- Introduction :
Considered a new online sales trend with a huge number of orders, many businesses and brands have started building Tiktok channels, as well as integrating TikTok Shop as a new sales point
- Advantage:
• Diverse product categories: from fashion, food to stationery, household appliances are all present at Tiktok Shop, giving customers many choices
• Information about products, reviews, purchases are displayed clearly
• User-friendly interface, easy to use
- Disadvantage:
• Invest effort to produce content continuously: For other e-commerce
platforms, when customers have a need, they will search for products, review reviews and place orders For Tiktok Shop, customers will usually place orders through videos or livestream sessions So, when customers miss videos or don't feel like the video content brings them, they will skip your Tiktok Shop This means that for Tiktok Shop, businesses must continuously produce quality content to attract customers
• Conversion based on emotions: As mentioned above, customers when shopping
at Tiktok Shop will often evaluate products through their emotions when watching videos, such as: fun content, eye-catching product angles Then proceed to install the product This will make it difficult for businesses to grasp the true needs of customers, and sales will depend entirely on video content, making it difficult for businesses to have clear indicators to propose new strategies
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- On Tiktok Shop, there are two groups of participants, including:
• Seller group: the seller needs to register their business or be the owner of an individual business household Please note to prepare the necessary documents when setting up Tiktok Shop
• Intermediary group: this group is the KOLs/KOCs, you will register to do affiliate marketing KOL/KOC channels must meet the condition of having at least 100,000 followers
- Fee collection method for each successful order: in the Vietnamese market, for each order after completion, Tiktok Shop will collect a fee from 1% and this number may change depending on the strategy and conditions other policies
- Post products : Product posting is done by sellers When posting products, sellers include product images, product descriptions, product attributes, prices of product variants, inventory, etc This is exactly the same as Shopee or Lazada, etc
- The full-featured Tiktok Shop Seller Center (on computer) and Tiktok Seller (on phone) systems allow sellers to post products as well as control order status easily and quickly
• Payment method: On Tiktok Shop there are 5 payment methods:
• Cash on delivery (COD)
• Checkout Momo E – Wallet
• Pay by debit/credit card
• Payment Zalopay
• Payment by electronic banking
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- In particular, COD payment upon delivery is a payment method that only applies to certain markets (including Vietnam)
- In Vietnam, this formula was added to help sellers reach many customers who cannot reach or are uncomfortable using online payment services.- Shipping unit: currently Tiktok Shop is cooperating with J&T Express - a shipping unit from Indonesia The shippers will go to the selling group's warehouse, pick up the goods and deliver them to the buyer
- Conversion shipping :Regarding shipping, Tiktok Shop's campaign will go to the seller's warehouse and deliver the goods to the buyer, similar to today's eBay
- Up to now, J&T Express is still the only delivery operator of Tiktok Shop
TikTok Shop's payment/refund management process
When is payment/refund management required?
- Product is mistaken
- Missing or defective products cannot be used
- The product delivered does not match the code description
- Slow delivery, slow processing
The return/refund process includes 3 participants: customer, seller and TikTok Shop
6 WAREHOUSE AND DISTRIBUTION
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- Using partner warehouses: With the self-operated seller (SD) model, Tiktokshop applies the Dropshipping model, so Tiktokshop only needs to transfer orders from buyers to sellers The seller will be responsible for shipping the goods to the customer This model applies to bulky goods with special installation requirements and products with short shelf life
- Create a new Warehouse and Set Service Area: Seller can set up to 20 Pickup warehouses, Please note that Shipping regions means warehouse service areas, it decides whether the stock in this warehouse can be delivered to the specific regions or not
- Enable Holiday Mode for Warehouse: Holiday Once the warehouse turns on holiday mode for a certain period, then the warehouse inventory will be set to 0
- Manage Stocks per warehouse: Seller can edit a single product's Multiwarehosue stock after ticking "Add to multiple warehouse" on Edit Product Page Once you Tick the
"Add to multiple warehouse ", it means the product will be located to more than warehouse, then you are able to edit the multiwarehouse stock, the button cannot be turned off any more
- Search for Product per warehouse: In the "Manage product" module, seller can check product stock and status as per warehouse
- Fulfill and Manage Orders per Warehouse: Admin of each warehouse can check the orders as per warehouse name
III Challenges
- Standing out in a crowded field:
Intense competition: TikTok Shop is booming, leading to fierce competition for attention and sales You'll need to be creative and strategic to stand out from the crowd
Algorithm complexities: Understanding and navigating the platform's algorithm can be complex It takes time and experimentation to figure out what content resonates with your target audience
- Content creation demands:
Engaging video production: Creating short, captivating videos that showcase your products in a fun and informative way is crucial This requires investment in production quality and storytelling skills
Live selling pressure: Live commerce is a core feature of TikTok Shop Mastering the art of live presentations, handling audience interaction, and managing technical hiccups can be demanding
- Logistics and fulfillment:
Delivery expectations: Fast and reliable delivery is essential for customer satisfaction Ensuring efficient logistics and fulfillment within TikTok Shop's