Tiktok Gets Another Lifeline, While Overseas Sellers Take Risks Amid Uncertainties in These Two Years | DeepKr

Written by Zhang Ziyi, Yuan Silai

Edited by Yuan Silai, Yang Xuan

When TikTok faced the threat of being banned for the third time in the United States, it managed to narrowly escape once again.

On January 19, 2025, Trump postponed the ban on TikTok. After being temporarily removed from the app stores for more than ten hours, and after influencers expressed their tearful goodbyes and sellers worried about what to do with the goods stranded at sea, TikTok resumed its services in the United States.

Sellers who target overseas markets have won the bet, for now.

With only five days left before the TikTok "sell or be banned" order was set to take effect, TikTok's investment promotion conference was still held as usual in Shenzhen, with sellers and service providers crowded tightly. A participating seller recalled to 36Kr that no one discussed the ban at the conference. "Everyone was talking about how to prepare goods for the peak season and how to build a content matrix."

No matter how many bad news there are, overseas sellers always selectively look at the bright side.

When the ban was imminent, a screenshot of unknown origin was widely circulated in the industry: Three senators and a congressman announced legislation to extend the TT ban period. In fact, it was just a call without any effect.

Optimism may also be TikTok employees' deliberate encouragement to sellers. When a seller asked the TikTok account manager about the ban, the other party said: There is no worry in the internal discussion, and even the bosses have set a very aggressive growth target. The two discussed how to make a big effort in 2025, and the seller also decided to be more positive and prepare more goods for promotions.

Sellers seem to be deliberately ignoring the sword hanging over their heads, with an air of bravado in the hustle and bustle. "In fact, we have no way to control it, and there is nothing we can do but wait." A seller told 36Kr.

But the persistence of merchants is: Stick to the last minute and earn the last penny.

In a situation where the growth rate of the total retail sales of consumer goods in the domestic society is less than 3%, the opportunity provided by TikTok for e-commerce sellers is too precious.

In the first three quarters of 2024, according to the estimated data of the General Administration of Customs, China's cross-border e-commerce imports and exports increased by 11.5% year-on-year, higher than the overall growth rate of foreign trade of 6.2% during the same period. Among them, the combined GMV of Temu, TikTok Shop, AliExpress, and SHEIN has exceeded hundreds of billions of dollars. These four platforms have been given a new title by the media: "The Four Cross-Border Dragons."

"There will not be another giant enterprise in the next ten years that will build a cross-border e-commerce platform from scratch and continuously give sellers traffic in the early stage. Sellers must seize this early dividend." An Amazon seller who also operates TikTok Shop and Temu told 36Kr.

Her younger brother, who used to work in a central enterprise, was encouraged by her to do Temu and achieved a performance of several hundred thousand yuan in just one month. "The money he earned in half a year in cross-border e-commerce is more than what he earned in the past few years of working."

Countless overseas sellers follow the Four Cross-Border Dragons to charge forward. They believe that no matter how countries compete, Chinese goods with high cost performance will always have a market.

However, beneath the surface hustle and bustle of the trillion-dollar cross-border e-commerce, the narrative of this wealth legend has been very different. TikTok's several near-death experiences in the United States are a microcosm of the fate of this generation of Chinese enterprises going global.

Don't forget that Trump, whom many sellers regard as a savior, left behind tariffs, isolationism, and tough confrontation as his "achievements" during his last term. Five years ago in the summer, it was he who signed the first executive order to ban TikTok, initiating the subsequent hunt for TikTok.

The era of unrestrained expansion is over. In 2025, every Chinese enterprise aspiring to go global must learn to dance with the world amid hostility and confrontation, and constraints and obstacles.

01 Two Key Decisions by Temu and Alibaba to Open a New Situation

When Lin Feng's orders on Temu reached 20,000, he only felt: "Shocked."

This was completely unexpected. For many years, he had been making a steady income on Amazon. In 2023, he was troubled by the unsalable products in his warehouse. On a friend's suggestion, he put the tail goods on Temu for disposal, but unexpectedly they became bestsellers. "On Amazon, I could sell at most one or two thousand orders a month, but on Temu, the sales volume increased tenfold." He recalled to 36Kr.

In the world of selling goods overseas, growth has never been as fierce as in the past two years.

If the overseas market used to be dominated by Amazon and grew at a steady pace, but under the double pressure of domestic domestic demand consumption and the operating environment of Internet companies, super companies such as ByteDance, Alibaba, and Pinduoduo have smashed into this market with unprecedented talents, desires, and money.

When Jiang Fan was transferred to Alibaba's international business in 2021, this sector was still on the periphery of the Alibaba Group. But under his reorganisation, AliExpress launched a new model at the end of 2022 that is crucial to the entire cross-border industry: Full Managed Service.

This new model is extremely simple for sellers: They only need to prepare the goods to the domestic warehouse of the platform, and the cross-border business is considered completed. All subsequent operations, fulfilment, customer service and other work are handled by the platform.

An industry insider told 36Kr that this insight is partly derived from observations during the epidemic: When the world relied on China's production capacity, a large number of overseas sellers received a large number of orders, but they were stuck in overseas logistics. Cargo ships floating at overseas ports unable to enter the port and the soaring shipping prices were wonders during the epidemic.

Under the new model, the platform side needs to invest unprecedented energy and bear high risks. But Alibaba's cross-border business has thus started a new round of growth. According to Alibaba's financial report, the overall orders of Alibaba International Digital Commerce Group increased by 24% year-on-year in the fourth quarter of 2023, especially thanks to the order growth brought by the AliExpress Choice channel - that is, the "Full Managed Service" business. The revenue growth was as high as 44% year-on-year.

Almost at the same time, Pinduoduo's overseas business Temu also strongly promoted the "Full Managed Service" model: In the circle of friends, there are Pinduoduo's red cross-border business investment promotion advertisements. They launched the banner of "0 commission, 0 threshold".

And Temu even used money to create a new high tide for cross-border business in the United States. In February 2023, after developing in the North American market for five months, it appeared in the US Super Bowl advertisement, which costs $230,000 per second. This is a bold but rational decision: The United States and China are the two largest e-commerce markets in the world, leaving all other countries far behind.

Older sellers realise that big players have brought a new round of crazy growth in the cross-border e-commerce industry.

During the period of the rapid expansion of the "Four Cross-Border Dragons", "shock" has become a common feeling for sellers. Compared with Zhang Huwang's achievement of going from 0 to 2,000 orders in 3 days, a product on Temu can reach the sales level of 3 to 6 months on Amazon in just half a day. "It's really a trend. Anything you put on can sell well. It's really exaggerated." Some sellers recalled.

Over the past few decades, the pattern of cross-border e-commerce in Europe and the United States has been set. Amazon is the dominant player, with global sales of nearly $600 billion, leaving a huge gap with the second place. But the Chinese rivals marked by Temu, as intruders, have broken the deadlock.

The new players bring the Chinese "rolling" method and an unprecedented desire for globalisation. Take Temu as an example, its early key members come from Duoduo Maicai, and these people are veterans who have experienced the bloody competition in every city and town in China. Although at the beginning, their cross-border experience was relatively limited, "At that time, the leaders had to ask the executive staff below about issues such as product qualification applications and product barcode standards." An industry insider close to the matter told 36Kr.

Owners of large and small overseas sellers are involved in this wave of going overseas. Anyone who left contact information at the Temu investment promotion conference can receive a call from the investment promotion manager. At 3 or 4 am, sellers will receive their messages. The voice on the phone is always full of energy: Do you have any products? Will you consider us? Some sellers may be confused: Do they not need to sleep 24 hours a day?

By the end of 2023, according to SimilarWeb data, Temu's independent visitors reached 467 million, ranking second among global e-commerce websites. And Sensor Tower data shows that as of August 2024, Temu's global user number has reached 91% of Amazon's.

Best-selling products are the rewards that bosses often get when following Temu to charge forward, and they will also be role models that are passed on from mouth to mouth.

Interestingly, after the dopamine rush from the explosive increase in orders subsides and the accounts are calculated: Temu's orders are ten times more than Amazon's, but how come the overall profit is not as high as Amazon's? Lin Feng is very confused about this.

The mystery behind it is simple: The price verification for sellers - this is Temu's weapon for generating explosive orders.

Generally speaking, Temu will require sellers to offer lower prices than domestic platforms such as 1688 and Pinduoduo. Once a product becomes a bestseller, the seller's backend will continuously receive an orange pop-up window prompting for a price reduction. Sellers certainly don't want to reduce the price, but in order to obtain more traffic, they must do so.

At a Temu investment promotion conference, some sellers called "price verification" a "threat", and the investment promotion manager replied with a smile: How can this be a threat? If you don't want to reduce the price, just turn it off. However, for those sellers who have a large amount of goods in the warehouse and the goods are highly homogeneous, they must reduce the price to clear the inventory.

Unless there are unique goods. "If you directly sell standard products, it is a very vicious competition. If you sell some products that cannot be found in the market, there is still an advantage." Lin Feng said.

Lin Feng, an 80s generation, is not young among cross-border sellers. After resigning from the system in his early years, he started doing Amazon for several years and accumulated a lot of factory contacts.

When he went to Anhui for an inspection, he had a meal with four bosses doing foreign trade. Several people were doing B-end business on Alibaba International Station, and some even had large overseas factories. When talking about Temu during the meal, the bosses were surprisingly confused: What is this? I haven't heard of it.

This made Lin Feng see an opportunity. "They (factory bosses) want to transform, then I can be responsible for the technology (developing products) and the operation of Temu, and the factory is responsible for production."

He made repeated trips to Ningbo to discuss with the factories how to make products that cannot be found in the market. In fact, it is just to make some small changes. "For example, for the taillight of a bicycle, add a Bluetooth module to it. The overall cost does not increase much, but the added value will be higher." Lin Feng told 36Kr.

Because he is not selling common goods, although he does not have the pricing power, Lin Feng can still get a net profit of 8 - 12%. If the platform waives the commission, Lin Feng's life is even better than when doing Amazon. He slowly gave up Amazon and concentrated on doing Temu.

Lin Feng thought that this comfort zone could last for a long time. "I am a very small seller, making some money to support a small team, and there is no problem, so I really want to continue like this."

In fact, there is no such thing as making money comfortably all the time.

Temu's rapid growth is inseparable from its crazy promotion of the "Full Managed Service" model - this model with a very low threshold has attracted many sellers without operational and fulfilment capabilities, and even amateurs can come in and have a try.

However, the Full Managed Service has insurmountable shortcomings. The logistics time of 7 to 10 days makes American consumers who are used to Amazon (FBA) delivering within 5 days quite dissatisfied. In the Full Managed Service model, logistics transportation and warehousing all rely on the platform's coordination. There have been several "warehouse explosion" incidents. The larger the platform, the more tense the logistics and warehousing resources will be.

Moreover, the goods of the Full Managed Service use air transport logistics mode, mainly light and small medium-sized products with low value, which limits the product variety.

The platform's all-inclusive service is only a stopgap measure. In 2024, almost all cross-border platforms, whether it is Temu or AliExpress, have shifted from "Full Managed Service" to "Semi-Managed Service".

According to 36Kr's understanding, the investment promotion and buyers of most platforms have transferred to the Semi-Managed Service team. At the Temu investment promotion conference, the investment promotion managers directly stated that more traffic support will be inclined to Semi-Managed Service.

Lin Feng, who does Full Managed Service, found that if his products on Temu overlap with the products on the platform that adopt the Semi-Managed Service model, the sales volume will drop by 30%. Many early Full Managed Service sellers found that they have been out of favour.

Lin Feng dare not take the risk of sending the goods to the overseas warehouse and still adheres to the Full Managed Service model, but the price verification is becoming more and more strict, and even for a product, the verified price is 40% lower than the cost. He began to look forward to the launch of Amazon's low-price store. "I can make more money on Temu, but I don't know if it will last."

After big sellers switch to Semi-Managed Service, the most headache is probably the shortcoming of Temu's overseas logistics.

An Amazon's top fishing gear brand originally just wanted to test the waters on Temu. A lot of their goods were placed in the warehouse of one of the "Four Cross-Border Dragons", but unexpectedly, the other party refused to deliver the goods to Temu. Moreover, they even intercepted the seller's mobile phone number information, resulting in the delivery failure.

This kind of action is becoming more and more common in platform competition. As a result, this big seller was fined five times. In the end, after a month of entanglement, the delivery problem was still not solved, and the listed products could not be sold at all.

In the Semi-Managed Service model, there are uncontrollable factors in overseas goods warehousing, logistics and other links.

Many people may overlook one point: China has the most mature and cheapest logistics system in the world. This is the foundation for the growth of e-commerce giants such as Pinduoduo, Taobao, and JD.com.

Unlike the domestic "Si Tong Yi Da" delivery services that operate all year round, there are too many variables in the "last mile" delivery overseas. In order to ensure the experience, some platforms require sellers to have the logistics information online within 48 hours, but what can be easily achieved in China is very difficult overseas.

The logistics habits in China and North America are different. The domestic model is that after the courier picks up the package, the courier number is immediately generated to facilitate the seller to control the delivery time. In North American countries, the courier drives to the overseas warehouse to pull the goods back to the courier station where they are located, and then scans the goods one by one with a scanner.

The locations of overseas warehouses and courier points are different. Sometimes, when the courier returns to the courier point after picking up the goods, they will get off work on time. The next day, they may handle other tasks, and the logistics delivery time of the goods is extended again and again.

Of course, some couriers can accept some benefits to help scan at the overseas warehouse, but many people would rather earn less money than work overtime.

Once the delivery time is missed, the platform's solution is to fine. "Some customers have 300 to 500 orders a day. If the delivery is overtime within 48 hours, they will be fined 10,000 to 80,000 yuan." An employee in the management of an overseas warehouse company told 36Kr.

Even with the annoying price verification pop-up windows and the possible "last mile" delivery fines that make sellers crazy, the reality is that a large number of sellers are still willing to stay on Temu.

The reason is simple: Temu is still generously spending money on traffic.

In the past,