After T86 was canceled, many merchants turned to the European market. All indications show that TikTok Shop is also plowing into the European market, aiming to build this segment into the next core strategic market area after Southeast Asia and North America, and the potential it shows should not be underestimated.
TikTok has announced the opening of its first office in Finland and will launch its first data center construction project in the Finnish city of Kovola through the “Cloverleaf Project,” according to a report by Social Media Today.
TikTok said the new data center is an important part of TikTok’s €12 billion “Project Clover” data security program, which aims to protect the data of 175 million European users.
Once operational, the data center will store local European user data as part of TikTok’s “European Secure Zone”. Localized data management capabilities will be enhanced to ensure the “highest security standards and regulatory requirements” are met.
Not long ago, TikTok Shop ushered in an important expansion in the European market, opening three new sites in Germany, France and Italy at the same time, officially launching e-commerce business in these three countries. Together with the previously opened local e-commerce platforms in the UK, Spain and Ireland, TikTok Shop has now successfully entered six core markets in the European e-commerce sector.
With the official opening of TikTok Shop’s European marketplace, a new blue ocean of commerce is unfolding in front of global merchants. As one TikTok Shop merchant said, “Entering now is like seizing the Amazon dividend six years ago.”
However, despite the attractive opportunities, merchants should not enter the market blindly, and should be wary of the “sword of Damocles” behind the opportunities.
1 The Hard Threshold from VAT to GDPR
The first thing merchants face when entering the European market is the stringent compliance requirements. The EU’s complex system of regulations is like a big, sophisticated net, and the slightest misstep could result in huge fines or even business shutdown. The following are the four core areas of compliance that must be mastered in order to enter the European market:
Tax Compliance: VAT Declaration and Tax Maze
The EU requires that goods entering a warehouse in a member state or with annual sales exceeding a threshold (e.g., 100,000 euros in Germany) must be registered for local value-added tax (VAT). Merchants need to be aware of:
(1) Differences in tax rates: Germany’s standard rate is 19%, France’s 20%, Italy’s 22%, with special reductions for categories such as books and food, and the use of the OSS (One Stop System) can simplify the process of multi-country filing.
(2) Withholding: Since 2023, the platform is required to withhold VAT on behalf of merchants, but merchants still need to declare on their own, a 3C merchant was recovered 280,000 euros for omitting to report VAT in France.
Data protection: the GDPR’s “iron fist” of regulation
The General Data Protection Regulation (GDPR) is very strict on the control of user privacy:
(1) Data collection: Users must be clearly informed of the purpose of the data, the storage period (default ≤ 6 months), disable the default checkbox advertising tracking function, and violate the maximum penalty of 4% of global revenue.
(2) Cross-border transmission: Non-EU companies are required to transmit data via EU Standard Contractual Clauses (SCCs) or local servers (e.g., AWS nodes in Frankfurt).
Product certification: CE marking and EPR registration
CE certification: covers 23 categories of products such as electronic equipment, toys, etc. It is required to retain technical documents for at least 10 years, and new smart home categories will be added in 2024. Unlabeled goods will be seized by customs.
EPR registration: Germany/France mandatory requirements for packaging law (Lucid No.), electronic equipment (EAR No.) and other certifications, a clothing business due to the lack of French EPR to 2,000 pieces of goods stranded at the port for 35 days.
Intellectual Property and Advertising Regulation
Trademark Search: Cross-searching in EUIPO and national databases is required. A headphone brand monitors the expiration date of German patents to avoid infringement in advance.
Advertising red line: absolute terms such as “the best” are prohibited.
For Chinese merchants planning to do TikTok Europe, it is recommended that these things need to be completed in terms of compliance:
1, Prioritize the completion of CE, UKCA and other product certification, and register the VAT tax number of the target country (such as the tax number beginning with DE in Germany).
2, hire a professional team to build a compliance system in line with EU laws and regulations, to avoid the risk of store closure due to various oversights.
3、Register EU trademarks to avoid complaints about imitation products.
2 Will Europe also adjust its tariff policy?
After the U.S., the European market has recently been sounding out tariff adjustments as well.
According to the BBC and other media reports, the United Kingdom has begun to assess the abolition of the £ 135 small duty-free policy. The report pointed out that this initiative stems from the consideration of fair competition in the market, the duty-free policy makes international merchants have an advantage over local enterprises, and the British government hopes to change the situation by adjusting the policy. Although it has not yet been finalized for cancellation, the assessment of the action has triggered the industry’s attention.
France is also making new moves, with plans to impose a fixed handling fee on imported small parcels as early as 2026, charging “a few euros” or “a few euro cents” per parcel, with the fee to be used to “finance inspections at ports of entry The fee will be used to “finance inspections at ports of entry” and will be borne by importers and platforms rather than consumers. Meanwhile, France is likely to follow up with the elimination of the €150 duty-free policy for small amounts, and is also preparing to push for the elimination of duty-free regulations for small parcels across the EU by 2028.
Although the relevant policies are not implemented immediately, merchants still need to pay close attention to the direction of the policy and adjust their business strategies in time to meet the challenges.
3 Layout content, products and services in advance
For Chinese merchants doing TikTok Europe, it is necessary to plan ahead in terms of content, products and services:
Localization of content: Hire creators who are familiar with the local environment to produce short videos, or invite overseas talents to shoot them, so as to avoid “machine-flip copywriting”. For example, for British users, incorporate British humor, and for French users, emphasize aesthetic design.
- Adjustment of product selection strategy: optimize SKUs in line with European consumption trends, for example, German users prefer functional household tools, and the Spanish market has a strong demand for fast fashion.
3、Localization of cross-border live broadcasting: Jointly carry out live broadcasting with European local KOLs (Key Opinion Leaders) to solve the language and cultural barriers. For example, inviting local Italian personalities to demonstrate the use of coffee machines in live broadcasts has increased the conversion rate by 3 times.
- Deepening of DTC (direct-to-consumer) mode: using TikTok user comments and interaction data to reverse customize products. For example, a headphone brand launched a “noise reduction + waterproof” functional model based on European user feedback, which was sold out on the day of its debut.
5, optimize the service experience: the service experience plays a pivotal role in the entire transaction process, which covers the commodity experience, logistics experience and user interaction experience and other dimensions, which together shape the consumer’s purchase experience. Problems in logistics, such as damage to goods during transportation, not only directly affect the integrity of the goods, but may also force consumers to request a return or exchange, which may lead to a decline in their trust in the brand. For the brand, such a consequence is undoubtedly not worth the loss, both the loss of commodity costs, but also damage to the brand image, can be said to be “lose-lose” deal.
Article source: www.tiktokdatatool.com
