TikTok Shop is Promoting Its Fully Managed Service

in May 31, 2024

TikTok Shop is promoting its fully managed service, allowing merchants to focus solely on product selection and supply. Recently, they held a seminar in Qingdao, introducing this model to over 200 merchants. This fully managed approach was launched last year and is now being expanded to various industrial zones this year, including Guangzhou, Yiwu, and Qingdao. The goal is to attract more merchants to leverage TikTok's traffic advantage for product monetization.

Not only TikTok, but the other three members of the "Four Little Dragons" going global—Temu, SHEIN, and AliExpress—are actively entering industrial zones to recruit people and goods, spreading their respective fully managed and semi-managed services. Comparatively, TikTok was later in launching its fully managed model among the Four Little Dragons. Currently, it has only opened sites in the UK, Saudi Arabia, and the US, focusing on categories such as home essentials, electronics, fashion accessories, and beauty products.

Compared to traditional e-commerce shelves, TikTok's fully managed model is more diversified. According to a seller who has joined TikTok Shop's fully managed service, the traffic sources for fully managed products and merchants' self-operated cross-border and local stores are consistent, divided into the mall and content domains. Fully managed products primarily enter the mall domain through the top-level entrance of the app, where platform buyers link them to various major promotional activities, channels, and recommended searches within the mall.
An executive from an MCN agency pointed out that for the platform, using fully managed products to test local influencer-led sales routes abroad is a convenient method. Last year, there was a case where a fully managed seller priced a product at £10 for supply and then listed it on the UK live stream "yellow car" for £6, benefiting from substantial platform subsidies, including logistics fees, MCN partnership commissions, and the difference between product sales price and cost.
For content service agencies, there is not much difference in content scenarios between TikTok's fully managed products and self-operated products; both can be directly featured on the "yellow car," although commission rates vary. However, a notable trend this year is the decline in commissions for fully managed products.

A clear trend is that TikTok Shop's fully managed business, entering its second year, is gradually reducing its promotional policies and moving towards normalized operations, becoming a standard option for new country sites. Currently, TikTok Shop's fully managed sites are only open in the UK, Saudi Arabia, and the US, which is relatively conservative compared to other "Four Little Dragons." However, business development personnel indicate that this year, the fully managed model will expand to more country sites, which is also a significant reason for their active promotion in various industrial zones.
On platforms like TikTok, various promotional events, holiday marketing, and trending topics provide opportunities for merchants to drive sales, benefiting fully managed products as well. According to official data, since the launch of TikTok Shop's fully managed service in May last year, there has been significant growth during each major promotional event. For instance, sales in the UK's summer promotion in July last year increased by 339%, while there was a 215% increase during the Black Friday promotion in the US.

Fully managed services are often referred to as "butler-level" services because they enable businesses to adopt a "zero operations" approach. Mainly catering to factory-type sellers, fully managed businesses face shortcomings in their sensitivity to overseas cultures and consumer demands, making it difficult to promptly adjust marketing and product strategies to fit the characteristics of content e-commerce platforms. However, platform managers and buyers in fully managed services can compensate for these shortcomings by analyzing the latest consumer trends, providing recommendations for popular products with good sales performance and special holiday styles, and assisting sellers in formulating more accurate marketing strategies. In the fully managed mode, while attempts at content marketing may provide additional benefits, stocking inventory remains the critical factor. For platforms like TikTok, sudden surges in sales delight fully managed sellers but also compel them to tackle the challenge of handling large volumes of orders.

From another perspective, the development of fully managed models has also driven self-operated sellers to enhance the uniqueness of their products. The natural distinction between fully managed and self-operated stores allows the former to focus more on price-advantaged white-label products, while the latter can develop branded products with distinctive features.