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- Alongside the EU, the US is making strides when it comes to fashion and sustainability, with proposed legislation like the FABRIC Act and state-level initiatives aiming to combat sub-minimum wages, enhance transparency, and support domestic garment manufacturing.
- In what seems like a counter-climate friendly move, TikTok this week introduced its Shop feature to US users, aiming to revolutionise e-commerce by combining engaging content with shoppable options. Previous shopping attempts on social media platforms yielded mixed results.
- Considering the substantial levels of credit card and household debt in the US, TikTok faces a formidable challenge in a market that is still finding its economic footing after years turbulence.
It was a busy week for fashion and sustainability in the US.
Hot on the heels of New York Fashion Week, New York Climate Week – which runs alongside the 78th session of the UN General Assembly from the 18 to the 22nd of September – saw demonstrators flood the streets of Manhattan, calling for the government to intensify its efforts against climate change. The New York Police Department arrested 114 people Monday after protesters blocked the entrance to a Federal Reserve building.
The annual week-long conference comes at a critical time. The world is experiencing its hottest year on record, along with deadly storms and catastrophic floods. According to a new study published in the journal Science Advances, we’ve significantly exceeded the “safe operating space for humanity” by breaching six out of nine “planetary boundaries” due to human-driven pollution and destruction of the natural environment. These planetary boundaries represent the limits of key global systems like climate, water, and biodiversity. Crossing these boundaries jeopardises the Earth’s ability to sustain a healthy environment, and this weakening resilience could hinder efforts to limit global warming to the 1.5°C climate target and push us closer to actual breaking points.
And the effects on the fashion industry will be profound. A recent report by investment firm Schroders and Cornell University’s Global Labour Institute, focusing on four major manufacturing hubs (Bangladesh, Cambodia, Pakistan, and Vietnam), reveals that if no action is taken to adapt, climate change could erase approximately $65 billion in export earnings and 1 million potential jobs by 2030. For more context, the four represent 18% of global apparel exports, house approximately 10 000 apparel and footwear factories and employ 10.6 million workers.
The EU has lately been dominating the headlines when it comes to sustainability and fashion with their 16 pieces of regulation focused on the fashion industry, but the US is catching up. Also within the past week, US Senator Kirsten Gillibrand and Congressman Jerrold Nadler have reintroduced the Fashioning Accountability and Building Real Institutional Change (FABRIC) Act to combat subminimum wages, enhance transparency, and support domestic garment manufacturing. The bill aims to improve conditions for 100,000 U.S. garment workers by ensuring fair pay, introducing new liability regulations for big retailers, and creating steps for record-keeping and openness. Also, it aims to boost domestic apparel manufacturing by creating a $50 million per year support program, administered by the Department of Labor, that will administer grants and technical aid to manufacturers in need of assistance with facilities and equipment upgrades, safety improvements, and workforce development. And on Monday, California passed a bill (endorsed by fashion’s biggest American trade groups) that will require large companies operating in the state to disclose their carbon emissions, while the New York Fashion Act has gained 84 co-sponsors ahead of the state legislature’s next session.
While all this was happening on the East Coast, in a move that is seemingly counter-climate action – TikTok rolled out its Shop feature to all US users (around 150 million of them) after months of testing. As part of the launch, the company is bringing features such as a dedicated shop tab on the home screen, live video shopping, shoppable ads and affiliate programs for creators. “With community-driven trends like #TikTokMadeMeBuyIt inspiring people to discover and share the products they love, TikTok is creating a new shopping culture,” the company wrote. “TikTok Shop will now bring shoppable videos and LIVE streams directly to For You feeds across the country – and give brands, merchants, and creators the tools to sell directly through shoppable content on the TikTok app.”
Social media companies have made persistent efforts to incorporate shopping features into their platforms, but the results have been underwhelming. In March, Instagram, owned by Meta, discontinued livestream product tagging and shopping, removing the shopping tab from the app’s navigation bar. Facebook followed suit by ending live shopping in October. And YouTube collaborated with Shopify in 2022 to assist content creators in selling products. So far the results have been mediocre.
So cracking the United States may be a difficult task, even for a company as powerful as TikTok given the socio-economic climate. In general, Americans are shelling out more money for everyday essentials compared to previous years. This year, the total credit card debt in the United States has exceeded $1 trillion, marking an all-time high. This adds to the already substantial household debt, which currently stands at around $17 trillion, based on data from the Federal Reserve.
But TikTok seems confident that the highly addictive nature of its algorithm will differentiate itself from Instagram and other platforms that have struggled to have success. Its strategy involves seamlessly integrating a continuous flow of products alongside targeted content within users’ feeds. Instead of prioritising social connections, the app places a higher emphasis on user engagement and personal interests, ensuring a constant stream of content. From the platform’s standpoint, it’s a logical progression to persuade these engaged users to make purchases based on what they are viewing.
It’s good news for content creators, as the Shop feature opens up potential revenue streams through commission-based marketing collaborations with brands. Additionally, TikTok is introducing “Fulfilled by TikTok,” a program that takes care of all the operational aspects for sellers, encompassing storage, packaging, and shipping.
TikTok Shop has already been rolled out in select regions across Asia and the United Kingdom. In Southeast Asia, TikTok boasts a substantial user base, with over 325 million monthly app visitors. In the past year, TikTok facilitated transactions worth $4.4 billion in Southeast Asia, a notable increase from $600 million in 2021, though it still falls short of Singaporean e-commerce giant Shopee’s impressive $48 billion in regional merchandise sales in 2022.
Conversely, the UK witnessed a different scenario when TikTok launched shopping in 2021. It faced challenges gaining traction, particularly with its emphasis on livestream shopping. The e-commerce landscape in the UK is highly competitive, with Amazon and Shein in the mix, the latter reportedly planning for an IPO. TikTok views itself more in line with platforms like Amazon or Alibaba’s Tmall rather than Shein. However, it’s worth noting that recent filings with Companies House reveal that Shein’s UK subsidiary generated £1.12 billion in revenue in the 16 months leading up to December 31, 2022. Shein regards the UK as a pivotal market. Recent speculation even hinted at the possibility of Shein acquiring – or at least establishing a partial ownership arrangement with – Frasers Group’s Missguided.
TikTok’s foray into US e-commerce coincides with the company grappling with government and school bans in the US due to espionage concerns. But despite regulatory scrutiny, and sentiment towards consuming less in the face of climate change, the platform remains prolific in generating substantial buzz. Whether the US market will be receptive to TikTok’s new initiative, taking it to Amazon-levels, will be something to watch.
Unlocking Success In Fashion Fulfilment; join us next week for an exclusive, live event
On Monday 25th September 2023 from 14:00 UK time (09:00 New York; 15:00 Paris), join The Interline & Kornit Digital for an exclusive, online event “Unlocking Success in Fashion Fulfilment” in collaboration with Inkthreadable and T-me – streaming live from Inkthreadable’s UK headquarters, and accessible via live stream right here on The Interline.
Expect insights from Inkthreadable’s co-founder Alex Cunliffe, T-Me’s founder James Fryer, and our own Editor-in-Chief Ben Hanson as they discuss how the shift from analogue to digital supply chains is enabling speed and sustainability, as well as unlocking entirely new business models.
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