TikTok’s shopping function allows creators, brands and businesses to display and sell their products directly on the platform. Then we will explain in detail the concepts of semi-closed loop and full closed loop in Tiktok’s operation and the difference between the two.
1. Definition and process
Semi-closed loop: Merchants publish products on Tiktok, and users complete browsing, purchase, payment and other links on Tiktok, but logistics and distribution are completed by third-party logistics companies.
Tiktok is responsible for front-end matters such as traffic diversion, product synchronization, and statistical data, while order collection, product management, logistics and distribution in the back-end matters are handed over to third parties such as independent stations.
Full closed loop: Merchants publish products on Tiktok stores, and users complete browsing, purchase, payment and other links on Tiktok, and logistics and distribution are also completed by the Tiktok platform or its designated logistics companies.
2. Functions and features
Semi-closed loop:
Advantages: Merchants can use the powerful traffic advantage of the Tiktok platform to expand the sales channels of their products.
Disadvantages: The efficiency of logistics and distribution cannot be effectively guaranteed, which may affect the user experience. At the same time, enterprises need to cooperate with third-party logistics companies, which increases operating costs and complexity.
Full closed loop:
Advantages: The Tiktok platform can provide one-stop services from product release to logistics and distribution, with more convenient user experience and higher logistics efficiency.
Disadvantages: Since the Tiktok platform needs to invest a lot of resources to build a logistics system, the threshold of the full closed loop model is relatively high, requiring merchants to have a certain scale.
3. Advantages and disadvantages analysis
User experience
Semi-closed loop: The user experience is relatively poor, because users need to contact the logistics company or wait for the delivery of the third-party logistics company, and cannot track the logistics information in real time during this period. Once a logistics problem occurs, there may be obstacles in the communication between users and enterprises.
Full closed loop: The user experience is significantly better than the semi-closed loop model. The Tiktok platform has a dedicated delivery service, and users can view logistics information in real time, improving the convenience and reliability of the shopping experience.
4. Operating costs and efficiency
Semi-closed loop: Enterprises need to contact logistics companies to manage order delivery, which will increase the operating costs and complexity of enterprises. At the same time, since logistics efficiency cannot be effectively guaranteed, the return rate and complaint rate of enterprises may increase.
Full closed loop: Tiktok platform needs to invest a lot of resources to build a logistics system, and once it is built, merchants can obtain stable and efficient logistics services to reduce operating costs.
5. Threshold and scalability
Semi-closed loop: The threshold is relatively low and suitable for newly established enterprises and small enterprises. These enterprises can use the Tiktok platform to obtain traffic and gradually expand the scale of their business.
Full closed loop: The threshold is high and requires the strength and scale of merchants. However, for large enterprises, the full closed loop model has better scalability. As the scale of business expands, merchants can use platform resources to further improve operational efficiency and user experience.
The above information is the concept of Tiktok semi-closed loop and full closed loop and the difference between the two. The choice of the two depends on the company’s own preferences and operating conditions. Enterprises can choose a closed-loop model that suits them according to their own operating conditions, and control and adjust each link in a timely and appropriate manner.