Could TikTok become the next Shopify?
Could TikTok become the next Shopify?
Learn more about how TikTok is pretotyping their way into e-commerce.
Pretotyping in action
Could TikTok become the next Shopify?
Spotted in the wild:
TikTok experimenting with e-commerce and full logistics fulfilment targeting the US market
According to the Every newsletter and an article from The Guardian , popular video hosting platform TikTok is looking to diversify its range by taking a slice of the e-commerce pie. They are currently testing a fulfilment capability, from purchase to delivery, in the UK and Indonesia with the goal of entering the US market. This will potentially put them up against e-commerce giants like Amazon and Shopify.
What's the Pretotype?
The Pretotype is a Provincial to test how various markets respond, taking into consideration the nuances of culture, pricing, infrastructure and more. It’s a huge and expensive pretotype that is almost in MVP territory, but it's appropriate for the scale of a platform like TikTok. They have started by vetting and signing up logistics providers and measuring their effectiveness, which is a smart move because it avoids building out infrastructure and gets results fast.
“We choose logistics partners. We do due diligence on their capability, and theirreliability, and then we choose them. And then we open a corporate account with the logistics company to negotiate discounts... Merchants cannot choose any other logistics company, which are not on our white list. It has to be on the TikTok side, the TikTok e-commerce team to select and negotiate a contract and then put it on the white list." — a former TikTok executive. You can read the full quote here .
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What’s working well? What could be better?
TikTok is testing by not building anything except for outsourcing or contracting the services they need for the experiment. Instead of making assumptions, they are testing in multiple countries to learn fast, starting with smaller markets, and learning, iterating and scaling to new markets as they discover what works and stopping what doesn't — YODA over OPD. I have no insight into earlier experiments, but I’m sure that this isn't experiment number one!
What are the takeaways?
When we say “test and learn fast and cheap”, this is relative to the size of your business, market, normal testing duration, available budget and the size of the prize. You should invest the minimum viable amount to test your ideas properly to get reliable results.
In the field
I recently delivered another guest lecture for Professor Edison Tse's product management class at Stanford University. It's always exciting to work with some of the brightest minds and ideas. This time I blended a lecture and a rapid workshop using Rapidly to work with the students on some of their ideas and show them Pretotyping in action. It was intense, and a bit rushed but a fun experiment.
One thing
“What is your Inspiration Generator to help you bump into random inspiration?”
— Daniel Vassallo, Small Bets webinar
Until next month, happy innovating! Leslie
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