iPower's First Steps on the TikTok Shop
We recently hosted CFO Kevin Vassily for a fireside chat. This report contains a transcript of the conversation from October 24, 2023, which can be accessed on demand. iPower has been on the US TikTok Shop for about six months prior to the formal full launch in September. iPower was selected by TikTok due to its large in-house software group, sophisticated ERP system that is optimized for e-commerce, good match from a product category perspective, and ability to offer TikTok users a positive shopping experience due to its fulfillment and direct product shipping capabilities. While fashion and beauty products are currently the two largest categories on the TikTok Shop (categories that iPower does not participate in at this time), iPower is present in some popular categories, such as kitchen, outdoors (e.g. firepits), and pet care. Although iPower is at the very inception of the TikTok Shop, it is currently the #1 seller in the kitchen category and the #4 seller in the pet care category. TikTok provides assistance and intelligence to iPower and other sellers as to which influencers to target to market their products. TikTok’s affiliates program regulates most aspects of the seller/influencer relationship, with the actual commission from seller to influencer being the main item up for negotiation (typically between 10% and 20% of the sale price). Right now, the short video format is the main vehicle used to generate sales, although live shopping is likely to follow, with iPower already working on building up a live selling team. TikTok’s feed algorithm drives the selling process with users receiving video offerings based on their past interests. iPower believes the TikTok Shop will be successful in the US based on its track record in other markets and preliminary results and can become a major sales channel for the company. Going forward, iPower will incorporate “TikTok optimization” considerations as an important factor in its data-driven product development process. iPower will also expand its business service offering to include assistance on the TikTok Shop as it believes the TikTok Shop will become an increasingly important e-commerce sales channel for its business services clients.
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