TikTok sues Amazon with US fulfillment center plans

TikTok plans to build its own product distribution centers in the United States, creating an e-commerce supply chain system that could directly challenge Amazon, say more than a dozen new job openings posted in the past two last weeks on LinkedIn.

why is it important: The move signifies TikTok’s commitment to e-commerce as the next major revenue stream, following explosive growth in its advertising business.

  • “By providing warehousing, delivery and customer service returns, our mission is to help sellers improve their operational capability and efficiency, provide buyers with a satisfying shopping experience, and ensure rapid growth and sustainability of TikTok Shop,” the company wrote in a job listing.

Details: According to the job postings, TikTok seeks to create an “international e-commerce fulfillment system” that will include international warehousing, customs clearances and supply chain systems that support national e-commerce efforts in the United States. United and cross-border e-commerce efforts. The systems will eventually perform package consolidation, transport goods from one stage to another and manage free returns.

  • One post, a logistics solutions manager for a global fulfillment center, details a Seattle-based employee’s plans to plan and design fulfillment centers and e-commerce logistics solutions that include freight transportation, forecasting orders and inventory management.
  • Another Seattle-based role calls for the creation of a new fulfillment services center “from the ground up.” The center, the post says, “is a global team responsible for the development and growth of our logistics solution,” and will include delivery of products by TikTok Shop to its sellers by “providing warehousing, delivery and returns from the customer service”.
  • While this role explicitly calls for the development of a fulfillment service for TikTok e-commerce logistics in the United States, other roles refer to a team responsible for a global logistics and warehousing network.

Between the lines: So far, it doesn’t look like TikTok is planning to create its own transport unit like Amazon. The job postings imply that TikTok would work with vendors to handle shipping, package consolidation and transportation.

  • A job description for a fulfillment logistics manager implies that, like Amazon, TikTok is looking to develop a free returns program.

State of play: Building its own e-commerce supply chain could give TikTok more control and increase profits in the United States and around the world.

  • TikTok is currently exploring a QVC-like live shopping feature in the US ahead of the holiday season that would help serve as a product recommendation tool for creators, according to the Financial Times.
  • TikTok began piloting a shopping feature in the US, Canada and the UK last year through an agreement with Shopify.
  • The company also launched a separate live shopping feature in the UK earlier this year, but reportedly struggled to onboard creators.

What they say : A TikTok spokesperson confirmed that in regions like the UK and Southeast Asia where TikTok now offers e-commerce programs, it aims to provide “a selection of merchants who offer a range of product options as well as delivery options”.

  • The spokesperson said the company’s “focus” remained on its currently active e-commerce regions.

The big picture: The meteoric growth of TikTok, which has already wreaked havoc on Facebook and Instagram’s Meta, has also begun to pose a threat to companies like Amazon and Google that rely on intent-based search advertising to boost business on their shopping platforms.

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