All you need is one ‘hero’ TikTok product

Brands can boost their gross merchandise value with just one best-selling SKU. 

One best-selling product out of a hundred is enough to drive an online shop’s gross merchandise value (GMV), according to TikTok. 

In fact, only 1% of stock-keeping units (SKU) in TikTok shops contribute to half of their GMV, according to the social media app’s own findings. 

Brands should not focus on a product range, Trixie Chua, performance marketing strategy lead at TikTok Global Business Marketing in the Asia-Pacific region, told the recent Retail Asia Summit in Singapore. 

“It all boils down to a brand’s ‘hero SKU’ — or its bestseller,” she said. “If a brand can earmark and get the right SKU to continue growing, that is how it can drive up its shop’s GMV.” 

The gross merchandise value is often used to determine the health of an e-commerce site's business because its revenue will be a function of gross merchandise sold and fees charged, according to Investopedia. “It's most useful as a comparative measure over time such as current quarter value versus previous quarter value.” 

TikTok analysed 9,000 sellers in the region and found that when an SKU reaches an average of 30 daily orders, it can grow as much as 36% in terms of order volume in the next 30 days. Reaching 100 daily means it will scale by more than 60% in the next month. 

But Chua said 90% of SKUs in TikTok shops struggle to break through this phase. 

“So what can a brand do to reach its first sale?” Chua asked. She noted that brands just need to list their product and let the app boost it whilst it acquires more relevant audiences. 

The next stage is growing an SKU to a ‘hero SKU’ through short videos promoting the product. “Brands can partner with several creators and put video shopping ads to extend the life cycle of these short videos.” 

She also introduced the company’s latest automated solution called product GMV max, which optimises the total return on investment by taking into account paid channels, affiliates and organic videos. 

“And last but not least, moving from a hero SKU to a superhero SKU stage, one of the most crucial factors is in terms of going live,” Chua said. 

Sellers who go live at a minimum of three hours daily — an average of 100 hours a month — reach the ‘superhero SKU’ stage three to four weeks faster than those who don’t. 

TikTok brands experience more stable GMV via live selling and can also make use of live shopping ads to get more traffic into their live rooms. 

“We also have an automated solution for this called GMV Max,” she said. “Brands just need to put in the products during a live selling and it automates reaching the right audiences.”