As it looks to bolster its in-app ecommerce push in the United Kingdom, TikTok has announced the launch of “GMV Max,” a new AI-powered tool that brands and small businesses in the region can use to minimize the time it takes to create a campaign for their TikTok shopping efforts.
According to the ByteDance-owned company, its new automated campaign management solution was created to maximize “GMV,” or Gross Merchandise Value -- the total value of goods sold by a company over a period of time -- by using AI to optimize brands' product listings in the social-media app.
For brand partners in the U.K., TikTok says GMV Max has the capability to cut campaign set-up time in half.
Available for products and Live shopping sessions on TikTok Shop, GMV Max automates audience targeting, bidding and creative selection to optimize campaign performance by identifying and scaling high-performing assets for sellers on the platform, the company explains.
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“Managing and running performance ads on TikTok Shop can demand a vast number of creative assets and time uploading new creatives, monitoring ad group performance, and pausing or scaling campaigns based on real-time results,” TikTok says.
GMV Max is designed to reduce these barriers, making campaign management simpler and more efficient, allowing sellers to direct more focus on increasing profitability and scaling their business. When the tool launched in the U.S. last year, sellers saw an average of 30% increase in GMV, the company reports.
The tool was developed to handle retailers' product advertising process by sourcing assets, creating ad campaigns and optimizing for sales “with incremental GMV that would not otherwise be attainable, in order to keep GMV to ad spend ratio stable.”
For years, TikTok has been attempting to translate its sister company Douyin's live-shopping successes in China, but has struggled to interest a significant number of users from Europe and the U.S. in the initiative.
Last year, for example, Douyin generated over $500 billion in product sales, while TikTok generated less than $4 billion.
Initial testing rounds of TikTok Shop in Western regions -- especially in the U.K. -- were met with consumer dissatisfaction and poor sales, although the company offered monetary incentives to content creators.
But after the unsuccessful rollout in 2021, TikTok Shop is now beginning to gain traction in the U.K., with over 200,000 active small businesses and more than 6,000 Live shopping sessions per day
The company also made major gains in the U..S. this holiday season, amassing over $100 million in single-day sales on Black Friday as well as a 165% increase in shoppers year-over-year, and showing newfound promise for its ability to compete with online retailers like Amazon, Temu and Shein.
TikTok is also expanding its ecommerce efforts to Europe, most recently launching in Spain.
If it achieves more success than initial testing rounds, TikTok's live shopping initiative's official launch in Europe may influence a larger shift in consumer shopping behaviors, as well as the way major online retailers utilize the creator economy in the future.