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Customer Classification 6
TikTok has emerged as a leading short video social networking platform, particularly popular among younger audiences, with 70% of its users aged 18-34 This demographic insight positions TikTok as a powerful marketing channel for businesses targeting dynamic young consumers To effectively leverage TikTok for marketing campaigns, businesses must understand the platform's user base, which can be categorized by age, gender, geographic location, and interests In Vietnam, 42% of users are aged 18-24 and 27% are 25-34, with a balanced gender distribution of 48% male and 52% female Additionally, TikTok users are predominantly located in major cities like Hanoi, Ho Chi Minh City, and Da Nang, and they have diverse interests ranging from music and fashion to beauty, food, and travel.
Understanding Tik Tok's customer will help businesses can choose appropriate content and marketing strategies effectively, thereby attracting and reaching target customers.
ANALYZE 8 I/ Tik Tok’ business Model Canvas 8
Revenue Streams a.Aa Ẽ
The business offers advertising space and essential display elements, including additional effects for posted content, charging advertisers accordingly In the context of TikTok, this model is effectively utilized to enhance ad visibility and engagement.
A hashtag challenge on TikTok offers businesses a strategic way to promote their content by creating a sponsored hashtag that enhances visibility and engagement By partnering with TikTok, companies can ensure their message reaches a wider audience, as users can easily discover and interact with the content associated with the popular hashtag To maintain this visibility, businesses will continue to invest in the promotion of their hashtag, fostering ongoing user engagement and brand awareness.
Video advertising on platforms like TikTok requires businesses to invest in their content to reach their audience effectively Similar to other social networks such as YouTube, TikTok employs a payment model based on every thousand impressions or clicks, ensuring that brands pay for the visibility and engagement their ads receive.
Branded effects and filters: TikTok will offer special stickers and filter enhancements to its partners
8.2/ Fee for transaction revenue model
Many businesses implement a transaction-based fee model, commonly seen in various industries, including e-commerce and online payments A notable example is TikTok, which has integrated this payment structure into its e-commerce platform.
TikTok coins are a virtual currency that users, known as TikTokers, purchase with real money to buy gifts for their favorite content creators on the TikTok platform When TikTokers acquire these coins, the platform benefits by earning a share of the profits from these transactions.
E-commerce Commissions: The fact that the e-commerce industry is growing strongly today, TikTok is also taking advantage of that to its advantage Ti1kTok allows app users to buy their desired products on it thanks to the TikTok shop Above all, they also promote this through cooperation with famous brands of products as well as current celebrities to increase the number of products sold and earn commissions based on sales they obtained
3/Multiple changes to revenue model
This is a model where businesses will apply many different methods or make many changes to their revenue model For TikTok it is using partnership:
TikTok has formed strategic partnerships with influential figures, content creators, and renowned artists to enhance its revenue and increase its popularity These collaborations serve as a catalyst for attracting more users to the platform In addition to engaging partners, TikTok actively works with them to create branded content, fostering strong relationships that contribute to the platform's ongoing growth and development.
TikTok is a versatile platform that offers a range of services and creative inspiration for content creators, equipped with numerous tools to enhance the creation process Additionally, it serves as a new job creation hub and fosters connections among diverse, transnational communities.
TikTok boasts a user-friendly and intuitive interface, allowing users, particularly Gen Z, to effortlessly navigate its features With icons and key functions easily accessible, users can quickly swipe through videos and utilize tools for recording, editing, and sharing their creations This simplicity fosters creativity and encourages comfortable use, contributing to TikTok's large user database and significant market share.
Launched in China as Douyin in 2016, Tik Tok quickly rose to prominence, amassing over 100 million users and 1 billion video views It has become the most downloaded free app on the App Store in many countries, with nearly 104 million downloads By 2019, Tik Tok was available in 150 countries, achieving a remarkable milestone of 2 billion downloads across the App Store and Google Play by 2021.
Advanced Algorithms, AI, and Technology:
TikTok utilizes artificial intelligence to analyze user behavior and predict habits, allowing for personalized content delivery This advanced algorithm not only facilitates quick content discovery but also optimizes users' timelines, significantly improving the overall user experience By enhancing engagement, these algorithms strengthen the connection between users and the platform.
Weaknesses
TikTok encounters significant challenges in moderating its video content, resulting in the presence of inappropriate or violative materials Users often upload videos that showcase violence or offensive content, which can breach community guidelines This situation creates a potentially unsafe environment, particularly for younger users who may not be adequately protected or monitored in the online space.
Lack of Strong Copyright Protection Policies:
TikTok currently lacks strong policies to safeguard users' intellectual property rights and copyrights, making it easier for content to be replicated without adequate protection Unlike YouTube, which requires users to credit original creators when reposting, TikTok's lenient approach can result in significant copyright violations This environment not only undermines the uniqueness of content but also stifles creativity among users on the platform.
Entertainment-Focused Content Over Educational Content:
TikTok is primarily recognized as an entertainment platform that specializes in short, engaging videos However, its focus on brief content restricts the ability to deliver comprehensive knowledge, making it less ideal for students and learners who are looking for a thorough exploration of specific subjects.
The rapid advancement of software technologies, exemplified by TikTok, highlights the platform's substantial growth potential Its user-friendly features for recording, editing, and sharing videos make TikTok an attractive opportunity for content creators seeking to engage audiences effectively.
Short videos and images are rapidly emerging as the leading global trend in digital content Major platforms such as YouTube and Facebook have launched features like YouTube Shorts and Facebook Reels to rival TikTok As the original innovator of this format, TikTok offers unique strategic advantages and opportunities for content creators to succeed.
TikTok transcends its role as an entertainment platform, drawing users from diverse sectors such as education, art, business, politics, and religion This wide-ranging appeal creates unique opportunities for both individuals and businesses to utilize the platform for advertising, sharing knowledge, and promoting various ideologies.
TikTok, a platform created by China's ByteDance, is under increasing scrutiny from several nations over data privacy and security issues Countries like India and the United States have implemented restrictions and launched investigations into TikTok's ties with the Chinese government, raising concerns about user data protection.
TikTok has faced multiple bans and restrictions from various countries, impacting its global growth Notably, India banned the app in June 2020, while Indonesia imposed restrictions due to inappropriate content The United States also enacted limitations, although TikTok made adjustments to address concerns These challenges significantly hinder TikTok's international development and sustainability.
Concerns over information security have led to significant challenges for TikTok, with various countries expressing worries about the potential misuse of users' personal data The platform has faced numerous accusations regarding the illegal collection of user information, notably being fined $5.7 million by the US Trade Commission in 2019 for violating children's privacy As a result, TikTok is under increasing pressure to enhance its security protocols and adhere to international privacy regulations.
III Tik Tok’s Customer Experience
I/ The importance of customer experience
Customer experience is crucial for TikTok's customer retention, as defined by Meyer and Schwager, who describe it as the internal and subjective response to any interaction with a company Direct contact occurs when customers engage with TikTok's application, whether through usage or after-sales service, while indirect contact includes unplanned encounters with the brand via advertising, word-of-mouth, news, and reviews.
Understanding direct customer experience on TikTok primarily revolves around user interactions within the mobile application Users engage with the platform by browsing, liking, sharing, and commenting on videos, while content creators utilize features for video creation and uploads Key factors influencing this experience include user interface design, loading times, video recommendations, and the editing tools available for creators Indirect customer experiences occur when users share their TikTok experiences, such as fun challenges or entertaining videos, with others Additionally, TikTok's advertising campaigns across various platforms further shape public perception of the app Optimizing customer experience is essential for maintaining user satisfaction and engagement.
In recent years, the significance of optimizing mobile customer experience has surged, transforming it from an elective feature to a fundamental requirement for mobile applications This shift is largely driven by the emergence of Gen Z, individuals born from the 1990s to early 2010s, who have grown up with the Internet and mobile technology A study by the National Retail Federation reveals that 62% of Gen Z users abandon difficult-to-navigate apps, while 60% refuse to use slow-loading platforms As TikTok faces increasing competition from short-form video rivals like YouTube Shorts and Instagram Reels, it becomes crucial for businesses to prioritize customer experience According to Gartner, over two-thirds of companies are now focusing on enhancing customer experience, a significant increase from just 36% previously.
Since 2010, enhancing customer experience has become a crucial strategy in the expanding mobile applications market With numerous options available for short-video social applications, users are more likely to remain loyal to the app that offers the best overall experience.
3/ New way for consuming content: Short-form Video Content
In today's fast-paced digital landscape, short-form video content has gained immense popularity among mobile users who prefer quick, engaging, and easily digestible content, typically lasting between 15 seconds to 1 minute This shift in consumer behavior is largely driven by the modern lifestyle of young people, who seek fast entertainment The widespread use of mobile devices and the Internet has further accelerated the reach of short-form videos TikTok has capitalized on this trend, becoming the leading platform for short-form video content with 3.5 billion downloads, far outpacing competitors like Instagram and Facebook TikTok's success is attributed to its user-friendly interface, rapid video loading times, and an effective algorithm that personalizes content recommendations, ensuring users remain engaged with content that interests them.
4/ Take advantage of Tik Tok in mobile e-commerce: Tik Tok Shop
Integrating mobile e-commerce into the TikTok app has led to significant success, with TikTok Shop quickly becoming the third-largest e-commerce platform in Vietnam, surpassing Sendo and Tiki, according to Omisell The combination of TikTok and TikTok Shop allows customers to purchase products through engaging short videos, advertisements, and live streams, enhancing the shopping experience by providing real-time content and direct interaction with sellers This seamless ordering process, coupled with targeted algorithms that connect products to the right customers, enables sellers to boost their sales effectively By merging innovative technology with social features, mobile e-commerce is evolving into a sustainable model that is transforming the way consumers shop on their mobile devices.
5/ Key aspects of customer experience in Tik Tok