TikTok Shop’s troubled expansion in the UK: staff exodus and culture shock
A culture clash between TikTok’s Chinese owners and some of its London employees has sparked a staff exodus and complaints about an aggressive corporate ethos that runs counter to typical UK working practices.
The friction has centered on the social media company’s e-commerce initiative, TikTok Shop, which launched in the UK in October.
Joshua Ma, a senior executive at ByteDance in China – owner of the viral video app – and head of e-commerce at TikTok Europe, outraged London-based staff at a dinner this year when he said that as that ‘capitalist’ he ‘didn’t Companies that don’t believe should provide maternity leave.
The episode is emblematic of a larger clash within the e-commerce division. At least 20 members of the London e-commerce team – around half of all staff – have left since TikTok Shop launched, while others say they are close to quitting. Two employees were paid working conditions settlements.
“There are people who leave every week, it’s like a game every Monday we ask who was fired, who quit,” said a current employee.
Ma’s visit was to check out TikTok Shop’s launch in its first market outside of Asia. The feature is an effort to bring QVC-style shopping to UK users. Brands and influencers livestream on the social media app, selling products through a clickable orange shopping cart on the screen.
TikTok has launched a formal investigation into Ma’s alleged comment and other allegations presented to the company by the Financial Times following interviews with 10 former and current members of the London e-commerce department, speaking as covered with anonymity. The company said it has a clear maternity leave policy in the UK, including 30 weeks of paid leave.
ByteDance raised $5 billion in December 2020 at a valuation of $180 billion, and revenue grew 111% last year to $34 billion, according to people familiar with the matter.
It seeks to justify this valuation by expanding its e-commerce offering, using a model that has proven lucrative for Douyin, TikTok’s sister app in China. Rivals YouTube and Instagram are developing similar features in Europe, while TikTok’s rapid growth and popularity among younger users has recently been cited by Meta, Facebook’s parent company, as a threat to its business.
Members of the e-commerce team in London said they would frequently have to work more than 12 hours a day, starting early to answer calls with China and ending late as live streams had more success in the evening, with “comment reports” to be filed immediately afterwards.
Images of employees working until the early hours were celebrated in internal communications as examples of ‘commitment’, while a handover in which an employee said he would be working on his vacation was shared as an example of good practice.
TikTok said employees are sometimes required to work flexible hours that “match customers’ usage patterns” and that it aims to make this “the exception rather than the norm”.
Several employees fell ill due to stress while some staff members were removed from customer accounts or demoted after taking leave.
“Culture is really toxic. Relations there are based on fear, not cooperation,” said a former London-based team leader. “They don’t care about burnout because it’s such a big company, they can just replace you. They rub shoulders with the TikTok brand.
As a revenue stream, TikTok Shop appears to lack traction in the UK, operating at a loss, while many live streams generate no sales.
Employees have complained that they have been given ‘unrealistic targets’ of up to £400,000 a month in total sales from live streams, when a successful broadcast from an average seller could generate less revenue £5,000. TikTok takes a 5% commission, which is often waived to attract new brands to the platform.
Those who failed to meet goals or respond to after-hours work requests were singled out and reprimanded on the company’s internal messaging system, former employees said. A former member of the management team said the culture almost pushed it to the bottom.
“TikTok Shop has only been operational in the UK for a few months, and we are rapidly investing in expanding resources, structures and processes to support a positive employee experience,” TikTok said. The company offers health and wellness support, as well as training and mentorship, he added.
TikTok Shop’s strategy is to source directly from cheap manufacturers in the UK and China and sell products at low cost.
Popular deals include a £14 ‘Dyson dupe’, a hair-styling device that resembles a Dyson Airwrap, which has a recommended retail price of £450.
Dyson said he did not approve of “inferior copycat products” and encouraged TikTok to take a more active role in removing “dupe products from sale”. TikTok said it has a counterfeit product monitoring team and has strict product guidelines.
Established brands such as Lookfantastic, L’Oréal and Charlotte Tilbury sold products through TikTok Shop. Brands are encouraged to offer flash sales and deep discounts, which TikTok often subsidizes. Operating costs associated with carrying out influencer livestreams, such as studio space and technical staff, are also often funded by TikTok.
“The model doesn’t work because it’s a different market and ecosystem in the UK, but management aren’t listening and refusing to make changes,” said a current employee. European brands were not comfortable with the level of discount on their products, said employees who dealt directly with the brands.
TikTok has hired people with experience in e-commerce and luxury brands such as Harrods, Asos and Amazon, offering login bonuses and sharing options.
Staff have used their contacts to lure big brands to the platform, but some said their long-term professional relationships with these companies have been ruined by having to aggressively negotiate discounts and sometimes terminate contracts without explanation. “I lost all credibility with traders,” said a current employee.
TikTok said it is “constantly learning, iterating and improving [its] service” and lets itself be guided by its community, its influencers and its merchants.
Influencers are supposed to stream every two weeks, receiving a pre-agreed commission for sales. They sometimes receive lump sum compensation, but this has been reduced recently for some, leading many people to drop out of the partnership.
“The TikTok Shop model does not work in the UK,” said a former employee. “It will only work if the business is willing to listen to how to do it in a culturally acceptable way that works for UK brands and consumers.”
Additional reporting by Hannah Murphy in San Francisco.