Oct 11, 2022 - Technology

Scoop: TikTok chases Amazon with plans for U.S. fulfillment centers

Illustration of a stuffed animal plush toy in the shape of the Tiktok logo

Illustration: Annelise Capossela/Axios

TikTok is planning to build its own product fulfillment centers in the U.S., creating an e-commerce supply chain system that could directly challenge Amazon, as indicated by more than a dozen new job openings posted in the past two weeks to LinkedIn.

Why it matters: The move signifies TikTok's commitment to e-commerce as its next major revenue stream, following the explosive growth of its ads business.

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

Details: According to the job postings, TikTok is looking to build an "international e-commerce fulfillment system" that will include international warehousing, customs clearings and supply chain systems that support domestic e-commerce efforts in the U.S. and cross-border e-commerce efforts. The systems will eventually perform parcel consolidation, along with transporting goods from one stage to the next and managing free returns.

  • One position, a logistics solutions manager for a global fulfillment center, is looking for a Seattle-based employee to plan and design fulfillment centers and e-commerce logistics solutions that include the transportation of goods, order prediction and inventory management.
  • Another Seattle-based role calls for the creation of a new fulfillment service center "from scratch." The center, the posting says, "is a global team responsible for developing and growing our logistics solution" and will include product fulfillment by TikTok Shop to its sellers by "providing warehousing, delivery, and customer service returns."
  • While that role explicitly calls for the development of fulfillment services for TikTok's e-commerce logistics in the U.S., other roles reference a team that is responsible for a global logistics and warehousing network.

Between the lines: For now, it does not appear that TikTok plans to build out its own transportation unit like Amazon. The job postings imply that TikTok would work with vendors to handle shipping, parcel consolidation and transportation.

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

State of play: Building out its own e-commerce supply chain could give TikTok more control and boost profits in the U.S. and around the world.

  • TikTok is currently exploring a QVC-like live shopping feature in the U.S. 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 U.S., Canada and the U.K. last year via a deal with Shopify.
  • The company also launched a separate live shopping feature in the U.K. earlier this year but reportedly struggled to get creators on board.

What they're saying: A TikTok spokesperson confirmed that in areas like the U.K. and Southeast Asia where TikTok now offers e-commerce programs, it aims to provide "a selection of merchants which offer a range of product options as well as delivery options."

  • The spokesperson said the company's "focus" remains on its currently active e-commerce regions.

The big picture: TikTok's meteoric growth, which has already taken its toll on Meta's Facebook and Instagram, has also begun to pose a threat to companies like Amazon and Google that rely on intent-based search advertising to drive business on their shopping platforms.

Go deeper