Chinese firms seeking to sell overseas take TikTok pivot
Print Edition
A somewhat simple video on TikTok showing a huge rainproof canopy in different settings attracted 7,000-plus “likes” and more than 100 comments from Africa to Southeast Asia. The video shows the products of the Guangfu Color Steel Structure, a small firm in Shanghai.
It’s one of thousands of short videos developed for TikTok by Chinese companies eager to expand their marketing efforts to the popular global platform from traditional reliance on domestic trade fairs and sites like Alibaba.com for sales.
New businesses have sprung up to feed the trend. Shanghai-based LTS Industrial Technology is one example.
Based in Jiading District, LTS has been focusing on online marketing services for industrial products since 2021. Last year, it has shifted its focus from Douyin, the Chinese version of TikTok, to its international version, helping Chinese firms access clients outside the country.
“The rising importance of TikTok, driven by short-format videos, presents both significant challenges and opportunities,” said Liu Lian, chief executive of the company. “Large corporations that have established sales power don’t really care about smaller possible clients found on social media, while smaller businesses often lack the necessary skills to chase them. This creates a huge business opportunity for us.”
ByteDance-owned TikTok operates in 150 countries and regions with 2.1 billion global registered users and growth projections surpassing 3 billion. The popular platform allows users to post their contact information on the accounts, so with an Internet connection, business can be conducted anywhere in the world.
“The success on Douyin made us realize that if we replicate our marketing mode to TikTok, where the customer base is much larger, it would yield far better results,” Liu told Shanghai Daily. “This has proven to be true. For some industries, we can generate over a thousand inquiries for a client in just one or two months.”
Why is TikTok such a good salesman? Probably because its videos can directly show viewers how goods are produced.
“The TikTok model is especially well-suited for industrial products, manufacturing, chemical raw materials and engineering machinery,” Liu said. “Buyers in these sectors are focused on more than just the final product; they evaluate the supplier based on production capabilities, assembly lines, certifications, warehousing and shipping services.”
Because TikTok content doesn’t change from region to region, companies don’t need to localize their content for different audiences.
The development of artificial intelligence has made the format much easier than in the past. Liu, like most of his clients, doesn’t speak much English, much less other languages.
AI allows Chinese scripts to be translated into dozens of languages through dubbing and subtitles.
Liu said he believes LTS’s business will be in demand for at least a decade because the world marketplace still relies heavily on Chinese production.
“It takes some time to build plants from scratch in other countries and more time to train employees, so now there is a big market, especially in the Middle East, with strong demand and low supplies,” he said.
In addition to use in business-to-business commerce, TikTok is also attracting Chinese merchants in the business-to-consumer space, especially those that failed to gain traction on sites like Amazon and eBay.
Shu Zixuan from the southern city of Shenzhen is one of them. His C-BULL Global company, which mainly sells Bluetooth speakers and underwear, now enjoys sales volume of 200 million yuan (US$28 million) a year on TikTok.
“I started my business in 2013,” Shu explained, “and initially 90 percent of our business was in China, with domestic sales reaching about 700 to 800 million yuan annually and overseas sales on Amazon of only 40 to 50 million yuan.”
He added, “We didn’t take overseas business seriously because the delivery costs on Amazon were too high, and we couldn’t invest much more into it.”
In September 2023, TikTok launched its shop in North America, and Shu found that many shop owners on Douyin were using it to expand business to the other side of the Pacific. He saw opportunity and seized it. TikTok, he found, suited his needs perfectly.
“Amazon operates on a listing logic, so that if you have a large number of listings, your ranking will be high,” Shu said. “That makes it difficult for new sellers because they’re starting from scratch with no accumulated history, and the only way they can compete is on price, which just leads to a race to the bottom.”
He said China’s Temu online sales platform is mainly for factory sales and doesn’t work for little guys like him, who can’t set their own prices.
“TikTok, on the other hand, uses an algorithm,” he said.
“A new product, if it’s any good, will automatically be recommended to users. So, any brand that starts a TikTok shop overseas will get traffic, which isn’t true for Amazon.”
However, the future of TikTok operations in the United States, its single largest pool of users, remains in limbo. The US Congress last year passed a law banning the platform from the US if it remains in the hands of China-based ByteDance, citing national security concerns.
US President Donald Trump, a big fan of social media, has delayed implementation of the law three times this year to allow negotiations on sale of TikTok’s American unit to a US-backed consortium of private equity investors. The latest extension expires in mid-September.
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