Knowledge management In TikTok livestream selling

Most of us know TikTok¹ by funny videos and perhaps the so-called “influencers” who keep us entertained whenever we enter the platform. However, there is an entirely different side of TikTok that people may underestimate: it is also a giant shopping platform. In China alone, with over 750 million daily active users² TikTok is a massive sales market that is for the taking. In the U.S., according to Bloomberg, the platform expects its U.S. commerce sales to rise tenfold, to $17.5 billion³ in 2024, serving its 107 million U.S. social users.

Two years ago, I had the opportunity to work for a local start-up company to see the e-commerce business side of TikTok for myself. The company was selling all kinds of products, specifically via TikTok livestream to UK customers. When I started to work for the company in 2022, the TikTok livestream selling market in China had already been very popular. The platform’s user-friendly experience, convenience, and affordable prices drove users to the never-ending livestreams on TikTok. Therefore, many people had grown the habit of buying things on TikTok, or simply doing a virtual browsing. However, while TikTok was already well-known in Western countries in 2022, the e-commerce side of the platform was yet to be fully caught on with foreign customers. Since TikTok initially started as a regional video platform in China, most of the contents that were posted in China were only to be seen by Chinese users. TikTok users overseas had only access to videos that were posted outside of China. In this article, when I refer to TikTok, I am talking about international TikTok that is available for international customers.

In the beginning, the president of the company decided to target UK customers. To adjust to the time difference, we had to do the livestream either early in the morning or late in the evening. In the beginning, we sold press-on-nails, a product that is theoretically low in cost and high in profit. Press-on-nails are physically light items, making them inexpensive for express delivery, therefore giving us the opportunity to ship high quantities. Our livestream was usually two to three hours long; however, we only managed to sell four to six products. Due to the low number of sales, our operating costs projected much higher than our profit.

The company was small in size with only four employees: I was the anchor responsible for live steaming/selling. There was a Live Streaming Operator who assisted me during the livestream. The company’s president was responsible for picking out the styles, stocking the goods, and contacting domestic and international delivery. There were also another two employees who were in charge of taking videos and photos of our products and posting them on TikTok as advertisements. The president paid every employee a fixed salary and monthly rent for live office space. As you can guess, selling only a handful of products was not enough to keep the lights on, therefore we started to investigate the reason(s) behind the low sale.

First, we thought it was because of the time difference. So, we tried to adjust. “We are not waking up early enough for our UK customers,” we thought. England is seven hours ahead of China and therefore the peak time for UK users is in the evening around 8 PM to 10 PM. That translated to 3 AM to 5 AM in China! Not an easy time to wake up to sell products. And so indeed it proved to be very challenging for us to conduct livestreams in the middle of the night every day.

Second, the competition for selling press-on-nails was already fierce in TikTok, with the majority also held by Chinese sellers. As I mentioned, the low price and the low weight of the product make them an excellent and attractive item to sell for business owners. That is why we chose to sell them. However, naturally so did many other livestream businesses based in China, who also were trying to sell press-on-nails to UK customers. The only difference in the products was the styles.

Finally, because our target customers were British, for technical reasons, we were only able to sell our products to UK customers. But every time we started our livestream, there were customers from other countries such as the Philippines, Singapore, and Malaysia, coming into our livestream. And among them, some wanted to buy the products, in which we had to reply that we were unable to ship to their country of destination. Back then, TikTok’s livestream algorithm and various functions were not well structured, making it not aligned with the audience watching the live stream. While it was promising to see customers not just from the UK offering to buy the product, that meant that we had to take time and energy to explain/reply to their requests, time and energy that could have been used productively otherwise.

Indeed, as we created the list of reasons, we became more aware of obstacles. As a result, our livestream increased to 20 users, and there were times that the number would soar to 10000. We then attempted to develop livestream strategies in order to keep our audience longer. In addition, we built an internal knowledge base that recorded and categorized successful live-streaming strategies, scripts, interaction techniques, and audience feedback. Other part-time English-speaking employees, who were in charge of hosting the livestreams, could access this database to then quickly learn and improve live stream performance. Moreover, I shared my knowledge and skills with new hosts through face-to-face conversations and workshops to ensure the flow and transfer of the techniques to improve performance.

Every day after the livestreams, all the employees held a meeting together to collect and analyze stream data, including but not limited to audience interactions, product sales, users’ feedback, comments, etc. The collected data then provided much needed support for livestreams, optimizing recommendation strategies and inventory management. On top of that, customer service and hosts provided feedback on common questions to improve live content. Later, we built a customer database that recorded customer preferences, purchase history, and feedback that helped provide more personalized product recommendations and interactions during live streams. All of the processes helped us get some loyal customers who came to our livestream almost every day and left positive comments in the comment sections and the livestream.

Sadly, despite all the efforts, the company failed in the end. Along the way, we tried to sell different products such as pajamas, toys, etc. However, none of the items achieved ideal (or even sufficient) sales figures. While the company failed to reach its sales goal and to grow its size, I took many lessons with me from my time at the company. I learned that it is indeed possible, through collecting the right knowledge, to increase productivity and in this case sales. The company did not survive, but it did improve its sales number and increased its customer interactions. Unfortunately, the other lesson that I took is that, sometimes, even with improvement, a company can fail to compete in the market. To put things into perspective, based on 2024 data from the U.S. Bureau of Labor Statistics, “20.4% of businesses fail in their first year after opening, 49.4% fail in their first 5 years, and 65.3% fail in their first 10 years”⁴.

However, as technology improves and changes rapidly, in 2024 the use of AI has become much more accessible than even the year prior. That means using AI-driven knowledge management (KM) systems that can assist the companies to swiftly find information, analyze the information, and then find solutions based on the acquired knowledge. In other words, the transition of data to information to knowledge happens almost instantly. In the case of livestream selling services, the AI can identify the popular products based on customer feedback and make efficient recommendations in real time⁵, thus helping to boost product sales. AI can then make further analysis to predict customer behavior and to target future potential sought-after products. I believe that in each failure of a company, there is something to be learned about the company’s management, the market, data and knowledge, costs, and profits, among many other factors. In the end, I believe, each company and each career role offers an experience. Here, I learned the importance of gathering knowledge and data collection.

Article source: Adapted from Knowledge Management In TikTok Livestream Selling prepared as part of the requirements for completion of course KM6304 Knowledge Management Strategies and Policies in the Nanyang Technological University Singapore Master of Science in Knowledge Management (KM).

Header image source: cottonbro studio on Pexels.

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