JUNE 28, 2023
BUSINESS
TikTok Sets Up Warehousing to
Advance Social Shopping Plans
The Council of Supply Chain
Management Professionals
State of Logistics Report
indicated that the year saw
the highest cost growth in
the last decade.
O The social network is
partnering with third-
party logistics fulfillment
service providers to set up
warehousing as it looks
to expand shopping on
the platform.
BY GLENN TAYLOR
Rumblings that TikTok wants to build its
own logistics network appear to be coming
to fruition. But TikTok is partnering
with outside logistics firms to make this
network a reality.
The social media powerhouse is working
with third-party logistics fulfillment
service providers that lease and operate
warehouses to store inventory and to pack
and ship orders for merchants selling on
the TikTok platform, The Information first
BUSINESS
What to Expect at the Museum
Of Ice Cream’s Miami Location
O The experiential retail
concept is opening a
permanent outpost in
the city early next year.
BY LAYLA ILCHI
The Museum of Ice Cream is gearing up
for its latest expansion.
The experiential retail concept founded
by global lifestyle company Figure8 in 2016
is opening its next permanent location
in Miami, located at the city’s Miami
Worldcenter. The location is opening in
early 2024.
The permanent location comes after the
Museum of Ice Cream hosted a pop-up in
Miami in 2017. According to the museum’s
cofounder and chief executive officer,
Maryellis Bunn, the company has been
working on opening a permanent Miami
store since the pop-up closed.
“When we started this company
almost eight years ago, there was nothing
in this industry and now we’re seeing
experiential really take the forefront across
the globe,” she said. “It’s been amazing to
not only be one of the founders carving
what [experiential retail] looks like, but
reported last week. Merchants will ship
their items into the designated warehouse
where their products will be stored and
dispatched as orders roll in.
TikTok confirmed the report to WWD
sister publication Sourcing Journal. The
ByteDance-owned company did not name
its new logistics partners, or the size and
locations of the warehouses where it will
stash sellers’ products.
A spokesperson noted that the fulfillment
program is invite-only for a small group of
sellers during the initial launch period.
Speculation about the fulfillment
service started in October when TikTok
job openings revealing that it wanted
to build an “international e-commerce
fulfillment system” that included
international warehousing, customs
clearings and supply chain systems
supporting both domestic e-commerce in
the U.S. and cross-border e-commerce.
what we’re seeing in the post-pandemic
environment is such a desire and a
demand from a consumer, particularly as
we get back to a normalized world again,
to not only go out and experience the
world again, but really be able to connect
back with individuals and all of our various
concepts and locations help to facilitate
that desire.”
The permanent Miami location will
be 14,000 square feet and span two
floors. This is the first time the company
has utilized artificial intelligence for its
immersive experiences, such as for the
museum’s “Cream Liner,” which is a
‘70s-inspired airplane that offers an audio-
visual experience.
Other immersive experiences include a
retro-inspired diner, a room of “mysterious
refrigerator doors” and a sensory tasting
room developed with fragrance company
International Flavors & Fragrances, which
helped create ice cream flavors inspired
by Miami. The museum is also offering its
popular sprinkle pool.
“We have so many incredible superfans,
so as we get closer and closer to our
opening date next year, we’re really
bringing them into the fold and allowing
The posts suggested that TikTok planned
to eventually get into parcel consolidation
and even manage free returns.
Seeds were planted for the move from
late last summer, when TikTok quietly hired
Andy Huang, a former chief logistics officer
for Alibaba’s Lazada Group, to lead its U.S.
logistics unit. Two months later, ByteDance
also brought in two more executives to
TikTok — Vivek Madhwaraj and Teodor
Antikarov — to be the head of U.S. fulfillment
solutions and the head of U.S. e-commerce
logistics solutions, respectively.
TikTok’s decision to outsource its
fulfillment network to a third-party
comes at a time when logistics costs and
warehouse rent continue to rise, with
Cushman & Wakefield saying average
earning rent jumped 3.5 percent quarter-
over-quarter and 17.2 percent year-over-
year to $9.19 per square foot.
Overall, the cost of doing business in
logistics increased significantly in 2022. The
State of Logistics Report from the Council
of Supply Chain Management Professionals
and Kearney indicated that the year saw the
highest cost growth over the past decade,
growing 19.6 percent year-over-year to
$2.3 trillion. Inventory carrying costs,
including storage, were 52 percent higher at
$759.3 billion, illustrating the drawbacks in
operating a fully owned network.
The biggest name in e-commerce has
felt the heat from the rising logistics costs.
While Amazon touts that it more than
doubled its nationwide warehousing and
logistics network during the peak of the
COVID-19 pandemic, the tech titan has since
curbed its expansion and regionalize into
eight individual networks in an effort to cut
costs. Amazon even brought back its Seller
Fulfilled Prime program to allow third-party
them to be not just visitors, but active
members within our walls,” Bunn said
about leveraging the experience of the
Miami pop-up for the permanent location.
“And then taking a lot of the feedback and
data that we received from our team there
and really using that to inform decisions as
we build something.”
Experiential retail has been growing
in popularity in the post-pandemic
retail climate, especially
retailers looking to artificial A rendering of the Museum of Ice Cream's Miami location.
intelligence to enhance
customers’ in-store
experiences. According to
a study by Klarna released
last month, 81 percent
of Gen Z and Millennial
surveyors expect to see
augmented reality or artificial
intelligence to enhance their
in-store experience, while 65
percent stated personalized
experiences are vital to their
purchase intent.
After operating pop-ups
across the country when it
launched, the Museum of Ice
Cream has transitioned to
25
sellers to ship Prime-eligible products out
of their own warehouses, and introduced
a new offering where local businesses can
apply to deliver Amazon packages.
E-commerce rival Shopify similarly
rethought the logistics investment when it
sold off its fulfillment business Deliverr to
digital freight forwarder Flexport. When
the divestment was announced, Shopify
chief executive officer and cofounder Tobi
Lütke described the logistics ambitions
“side quests” that distracted from
Shopify’s main goals on the front-facing
side of its e-commerce business.
TikTok’s fulfillment ambitions comes
as the company seeks to penetrate social
commerce. TikTok allows its users to
make purchases directly through the
app’s TikTok Shop feature, launched in
November, which has onboarded popular
Gen Z brands like PacSun and Revolve.
While another Information report in
April said the service was seeing slow
interest in the U.S. due to merchants’
concerns over whether the platform
could be banned, TikTok seems to have a
longer-term goal to sell its own Amazon
Basics-like products through TikTok Shop
to U.S. users.
Another report from The Financial
Times indicated Wednesday that TikTok
has been testing the sale and shipment of
its own goods in its U.K.-based app, in a
new shopping section Trendy Beat.
Hinting at expanding in the States,
TikTok filed a trademark application in
the U.S. for Trendy Beat on May 30, listing
mostly clothing, bathing suits and footwear
as goods associated with the mark.
TikTok’s foray into shopping comes
after just about every major social media
platform has launched its own “buy button”
or live shopping feature. Unfortunately,
these attempts haven’t fully taken off.
After heavily pushing its Shop feature
during the pandemic, Instagram removed
the tab in January before dropping its
livestream shopping feature in March.
Facebook also shut down its live shopping
feature last October to shift its focus to its
short-form video feature Reels.
opening permanent locations over the last
few years, including locations in New York,
Austin, Chicago and Singapore.
Bunn stated the company will be
announcing other permanent locations,
both domestically and globally, in the next
few months as well as a new retail concept
with Figure8.
“[The goal is] really being able to create
a respite and a place in which individuals’
imagination and ability come together
with the people they come with as well as
strangers to create memories,” Bunn said
on her goals for the Miami location. “If
we can have everyone who walks through
the door be a little bit more curious and
a little bit curious with someone else they
perhaps don’t know, we would measure
that to be a very successful new unit.”
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