In 2024, TikTok continues to demonstrate its strength in the e-commerce industry by becoming one of the most popular sales platforms in Vietnam. However, an issue that many fashion businesses, especially fashion brands such as L'AMME, are concerned about is the updated TikTok floor fee for the fashion industry. This not only creates a cost challenge but also opens up new opportunities and strategies for brands.
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| L'AMME maternity fashion brand. |
TikTok Shop's New Platform Commission Fees and How Fashion Brands Adapt
According to the TikTok Shop update mechanism on October 1, 2024, the commission fee will be automatically deducted from the final payment of the order after successful delivery. This commission fee is calculated based on the product value and differs between product categories, as well as between types of sellers (regular sellers and mall sellers).
Specifically, the current platform commission fees are as follows:
- Electronics Industry: Commission fees range from 1.00% to 2.00%.
- Food and household industry: Commission fees range from 2.00% to 3.50%.
- Fashion Industry: Commissions range from 3.00% to 4.54%, which is different from other industries. This fee reflects the creative demands of the fashion industry, where media content and customer experience play a key role in driving sales.
At TikTok Shop, sellers will have to pay a commission fee based on a percentage of the product value, excluding discounts, promotions or other incentives. This fee may vary depending on the type of product and the conditions of each booth, in which mall sellers will usually have a different commission fee than regular sellers.
This is a big change for fashion brands, especially maternity brands like L'AMME, where the fee can have a significant impact on profits, especially for small businesses.
L'AMME, a prominent maternity fashion brand on TikTok, has noticed this gap in its marketing strategy. “The fashion industry, especially maternity fashion, requires a high level of creativity in conveying messages through videos. This requires businesses to focus on optimizing the content in each video, understanding the insights and solving the problems that customers are facing. From there, increase the conversion rate through each video. That is an effective and sustainable solution to meet the increased costs.” In addition, the maternity fashion industry also has its own unique characteristics, requiring a flexible marketing strategy that is suitable for each customer group. This fee partly reflects the fierce competition between brands in attracting customers' attention.
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| Ngo Mai Phuong - CEO of maternity fashion brand L'AMME. |
Floor Fee Update Impacts Small Businesses
While the floor fee update helps TikTok maximize profits from big brands, for small businesses, especially maternity fashion brands like L'AMME, this fee is a big challenge.
“Paying additional commission fees requires us to be more responsible in providing customer care services. However, we do not rely solely on paid advertising. We leverage the power of the TikTok community, partnering with KOLs and content creators to create effective and cost-effective campaigns,” said L'AMME CEO Ngo Mai Phuong.
In this way, L'AMME has maintained a strong presence on TikTok without having to rely too much on the platform's fees. In particular, the strategy of collaborating with TikTokers in the maternity fashion industry also helps L'AMME reduce advertising costs, while increasing trust and interaction from consumers.
TikTok will continue to be an important platform in the marketing strategies of fashion brands in 2024 and beyond. Although commission fees are a factor to consider, with creative and flexible strategies, maternity fashion brands like L'AMME can still grow and optimize costs. By maintaining a close connection with consumers and taking advantage of creative opportunities, L'AMME has and will continue to maintain its position on the TikTok platform.
Source: https://baoquocte.vn/tiktok-shop-cap-nhat-phi-hoa-hong-nen-tang-va-goc-nhin-tu-thuong-hieu-thoi-trang-bau-lamme-294323.html
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