Over the last few years, short video platforms have supplanted photo-based social media platforms across the world. As Tik Tok has taken over the screen time of youth across the world, Douyin, Tik Tok’s Chinese sister app from the same company, has done the same in China.
According to Statista, Douyin’s MAU reached 743 million users by December of 2022, reflecting roughly ten percent growth year on year. This puts it ahead of its main competitor, Kuaishou, which boasted 529 million in November of the same year.
But as Douyin becomes the go-to social media app for Chinese youth, instead of looking to advertisements for revenue, it has expanded into the ecommerce industry. This new business strategy for Chinese social media tech giants has become known as social ecommerce, and it’s a booming business in China. Today, Douyin is as much an ecommerce platform as it is a social media platform.
In May of this year, Wei Wenwen, president of Douyin’s ecommerce department revealed that the Douyin’s GMV has increased by more than 80% compared to the last year. According to The Information, consumers spent 208 billion USD on purchases on Douyin in 2022.
Douyin’s E-commerce Ambitions
What sets Douyin apart from its sister international platform Tik Tok is that it is catered to solely the Chinese market. This has allowed Douyin to effectively expand into the ecommerce space, as there is a unified set of regulations and logistics networks it can localize to.
In 2018, Douyin began integrating ecommerce functionality on its platform, selling traffic to third party ecommerce platforms like Alibaba’s Tmall and Taobao in addition to JD.com, VIPShop, and Pinduoduo. By 2020, Douyin had launched its own in-house ecommerce platform and began restricting livestream sales to third-party ecommerce platforms. In 2021, Douyin launched flagship stores on their native ecommerce platform.
According to ChinaTalk, by 2021, three years into its expansion into ecommerce, Douyin had already claimed 7.5% of China’s 10.8 trillion USD ecommerce market, behind only Alibaba, JD.com, and Pinduoduo.
Under Armour’s official flagship store and official Douyin account
What is Douyin Global Shopping (抖音全球购)?
In 2021, Douyin launched Douyin Global Shopping 抖音全球购, a cross-border marketplace for international brands, foreign retailers, and Daigou 代购 (cross-border exporters). Similar to Alibaba’s Tmall Global, Douyin Global Shopping is a B2C platform for cross-border selling to Chinese consumers.
Douyin Global Shopping aims to help Douyin expand their ecommerce ambitions into the massive market of cross-border ecommerce, which in China totalled 2.74 trillion USD at the end of 2021 according to Statista.
Examples of Douyin Global Shopping products. Contrast these with the product page from Under Armour shown earlier, which is a flagship store, but not a cross-border store.
Products for sale via Douyin Global Shopping are searchable directly within Douyin’s ecommerce page, along with products that are not sold as cross-border imports. The only difference for cross-border products is that they are labelled as import products in the product page, with a country of origin listed. Product prices include duty and taxes.
Douyin Global vs Tmall Global (Pros and Cons)
According to Statista, Tmall accounted for 63.1% of all transactions on B2C platforms in the third quarter of 2022. In the cross-border e-commerce space, Tmall Global still holds the largest share of the market at 38.1% in Q2 of 2022 according to Analysys.
But while Tmall may be the incumbent leader, its growth rate has slowed in recent years. This has made it vulnerable to the fast expansion of Douyin into the B2C ecommerce space.
So how does Douyin Global compare with Tmall Global, considering the market dominance of the latter?
Platform Differences and Similarities
On the surface, Douyin and Tmall could not be more different. Tmall is primarily an ecommerce platform for buying products. Douyin is a short video platform for entertainment.
But underneath the surface, both platforms share more similarities than is obvious at first glance. Ecommerce is their common link, and both heavily leverage livestreams for marketing and sales, a market expected to reach 720 billion USD by the end of this year. They both have their own cross-border and domestic logistics networks, though Tmall’s is more mature than Douyin’s.
As a social ecommerce platform, Douyin has the upper hand in terms of coverage of the sales pipeline. Their pre-existing userbase primarily visit Douyin for entertainment, meaning Douyin wins on the traffic front. While Douyin content is mostly for entertainment, much of it serves as marketing for products sold on the ecommerce arm of the platform. Without needing to leave the app, consumers can be entertained, learn about a product, check reviews, and make a purchase all within a single Douyin session despite not opening Douyin with the intention of making a purchase. This means that for brands to be successful on Douyin, they can rely on making interesting and creative content that can go viral from a more grassroots level.
This contrasts with Tmall, which usually serves as the final app users open before making their purchase. Marketing for Tmall products need to be more multi-channel than Douyin products for this reason, and the initial marketing of brands and products often occur outside of Tmall on various social media platforms.
Differences in Platform Pricing
|Security Deposit||Annual Fee||Commission|
|Tmall Global||One-time deposit of 50,000 to 300,000 RMB||30,000 to 60,000 RMB depending on product category||0.5-5% based on product category plus 1% Alipay service fee per item sold|
|Douyin Global Shopping||One-time deposit of 100,000 to 400,000 RMB||~7000 RMB, but may differ depending on product category||2-10% based on product category|
Compared to Douyin Global Shopping, Tmall Global is the more mature cross-border ecommerce platform. It has already established itself as a trustworthy platform for consumers to purchase high value cross-border products from.
However, as a relatively new entrant to the cross-border ecommerce space, Douyin Global Shopping, as part of a high-traffic social ecommerce platform, is poised to swiftly grow their share of the market. Many brands selling on Tmall or even JD.com and other primarily ecommerce-focused platforms still conduct marketing on Douyin for its massive traffic. With Douyin’s aggressive expansion into the ecommerce space, its plan is to divert more and more ecommerce traffic to its own ecommerce platform.
With a lower annual fee but higher deposit and commission rate than Tmall, Douyin Global Shopping will appeal more to medium-sized to global cross-border brands and retailers.
How Do I Start Selling on Douyin Global?
The barrier for entry to begin selling cross-border via Douyin Global Shopping is significantly higher than registering for a personal store on Douyin. In the following section, we’ll explain the process of opening a Douyin Global Shopping store, from registration to documentation requirements to setting up a store:
Requirements for Merchants:
- Having a company entity registered overseas or in Hong Kong, Macau, or Taiwan that has retail and trade qualifications in the country or territory they are registered in.
- Having a domestic agent in mainland China, with a Chinese corporate bank account and business license, that can undertake joint and several liability.
- Having a corporate bank account overseas or in Hong Kong, Macau, or Taiwan.
- Having a Letter of Authorization (brand authorization letter) or complete supply chain documentation
Aside from these basic requirements, merchants are also required to prove their qualifications to Douyin Global Shopping:
For Merchants with Brand Authorization
Douyin requires records of your store’s sales metric on other platforms, such as Tmall Global, JD.com Global.
For Merchants without Brand Authorization
Aside from records of your store’s sales metrics, Douyin will also require brand qualification in the form of purchase documents, invoices, or purchase contracts from within third-level authorization*.
First level authorization would refer to a situation where the brand authorizes a merchant (referred here as merchant A) to sell their product. For first level authorization, the authorization chain proceeds like so: Brand -> A.
When we reach third level authorization, it reflects a situation where the brand authorizes merchant A to sell products from the brand, and merchant A authorizes merchant B to sell, and merchant B authorizes merchant C to sell. By the third level authorization, the authorization chain proceeds like so: Brand -> A -> B -> C.
In addition, for merchants without brand authorization, the security deposit on Douyin is double the amount for merchants compared to merchants holding brand authorization selling in the same product category.
To register for opening a shop with Douyin Global Shopping, merchants have two options.
- Register online via filling out a questionnaire on the website: https://b.guantou.com/
This process is recommended for established stores and brands with a clear record of sales metrics from other cross-border ecommerce platforms. After approval, Douyin will whitelist you for a Douyin Global Shopping store.
- Find a whitelisting provider (报白公司). These providers can help with the whitelisting process for Douyin Global Shopping, especially for brands and retailers who do not have a presence on other ecommerce platforms.
Douyin Global Shopping will give priority to and actively recruit brands, brand agents, and retailers that have well-known brick-and-mortar stores or B2C websites outside of mainland China that have not yet entered the Chinese market.
Opening a Store
There are four types of stores you can open for Douyin Global Shopping, and they each have different naming conventions.
|Store Type||Description||Naming Convention|
|Brand’s Flagship Store品牌旗舰店||Flagship store operated directly by a brand, or by a merchant given exclusive licensing by trademark holder||Own Brand: Brand Name + Category Name + Official Overseas Flagship Store
Exclusive Authorized Brand: Brand Name + Category Name + Overseas Flagship Store
|Retailer’s Flagship Store卖场型旗舰店||Flagship store operated by an overseas online or offline retail company who either owns the Class 35 service trademark or is a company with a corporate association relationship with the trademark holder and holds a first level exclusive authorization from the trademark owner||Class 35 Trademark Name + Category Name + Overseas Flagship Store|
|Specialty Store 专卖店||Store operated by a retailer that has been given distribution authorization by a brand||Brand name + Business name + Category Name + Overseas Specialty Store|
|Franchise Store 专营店||Store operated by a retailer with distribution authorization. Franchise stores must represent at least two brands in operation||Business name/associated name + Category Name + Overseas Franchise Store|
What Products are Suited for Douyin Global Shopping?
Currently, most products on Douyin Global Shopping consist of health supplements and beauty/skincare products.
These are products where safety and quality are of the utmost concern. The high barrier of entry and stringent curation by Douyin for Douyin Global Shopping merchants provide assurance that the premium price buyers are willing to spend on these products reflect safety and quality guarantees.
An overview of brands on Douyin Global Shopping includes major supplements brands such as GNC, beauty/skincare brands like Neutrogena and The Ordinary, and pharmaceutical brands like Bayer.