Shopping seems to be inherent to TikTok. The sudden rise in popularity of the short-video entertainment app has paved the way for its evolution. In August 2021, TikTok Shop was born, and the e-commerce landscape has never been the same again.
Before TikTok Shop was introduced, online shopping had been happening organically through TikTok. With millions of views and interactions, it was not surprising for marketers, brands, and businesses to flock to TikTok to reach out to their target consumers.
In the early days, TikTok creators simply promoted products on their feeds. All their viewers needed to do was to find and check out those products and brands in various e-commerce sites and even local stores. In return, creators were earning from ad placements, commissions, or straight payments for the service from businesses and brands.
But TikTok wanted to formalize the transactions and integrate e-commerce into its popular platform. TikTok Shop revolutionized social commerce and introduced a new experience that brings in-app shopping transactions. It streamlined the discovery of products into the platform. Millions of TikTok app users love that they can now instantly shop while enjoying entertainment content. There is no need to leave the app to do the shopping anymore.
TikTok Shop is now placing products and brands right before TikTok app users’ eyes in a manner that remains entertaining. Infomercials are seamlessly blended with small-screen live streams at times. The consequence is an enticing, interesting, and closer connection between the businesses and the customers which are usually not to be realized in other e-commerce forms.
Just like other e-commerce sites and apps, a consumer is presented with many options for payment. This article focuses on a popular payment method across Southeast Asia — Cash On Delivery.
How TikTok Shop works
TikTok Shop is characterized by that yellow shopping cart icon located at the homepage’s lower left corner. A TikTok creator can make his/her usual entertainment videos and promote the products. At the same time, the TikTok viewer can instantly click on the yellow cart icon to initiate the ordering and checkout process.
TikTok Shop’s product checkout process is intuitive; it is almost the same as the process consumers have become familiar with in many other online stores. Aside from credit card payments, popular in the platform these days are bank transfers and e-wallet payments. Cash On Delivery is a popular option, especially for unbanked customers and those who are just not comfortable using credit/debit card payments and other e-payment modes.
Just like in other e-commerce platforms, in TikTok Shop Cash On Delivery option, the TikTok Shop store owner mostly shoulders significant financial risk. The merchant, or retailer, is also the one who pays for the immediate shipping costs because there is still uncertainty whether the customer will pay for the goods upon delivery or not.
In the usual Cash On Delivery payment mode, the customer has the option not to pay for the goods delivered if he/she thinks the quality is far from advertised, the delivered merchandise is not the one actually ordered, or the item is damaged. In such occurrences, the customer coordinates with the TikTok Shop owner for possible returns.
TikTok Shop Cash On Delivery
Cash On Delivery remains a popular payment option in many markets across Southeast Asia. It is a manual payment method that facilitates the acceptance of online orders with the payments made outside the TikTok Shop store’s online checkout.
With TikTok Shop Cash On Delivery, no payment is collected during the placement of orders. Customers are given the payment information for the transaction and the instructions to pay the amount during the delivery of the goods. The order will then reflect ‘Awaiting Payment’ status in the TikTok Shop. Upon delivery and payment, the TikTok Shop owner can then change the order status to ‘Paid,’ which indicates the completion of the entire transaction process.
How to enable TikTok Shop Cash On Delivery
Although TikTok content promoting and selling products abound in the app and can readily be viewed by users, there is a requirement to activate TikTok Shop and its features before enjoying all its features, including the option for Cash On Delivery.
For those who are not able to use TikTok Shop Cash On Delivery to buy an item or product even though the TikTok feature is already activated on the account, there could be several possible reasons, which need to be resolved or acted on first to be able to proceed to TikTok Shop Cash On Delivery transactions.
First, the TikTok Shop store owner may have yet to activate the Cash On Delivery feature from his/her end. This could be the reason the Cash On Delivery payment option is not readily available when you place an order or check out in the TikTok Shop. In this case, the consumer could not do anything but decide to proceed using other payment options or not to proceed and find other shops with the option.
Second, the customer’s destination address may still be incomplete during the time of the transaction. TikTok Shop Cash on Delivery could never be implemented if the customer’s delivery address is erroneous or is lacking pertinent information that would make product delivery almost impossible. An incomplete delivery address will disable the process, along with the Cash On Delivery payment transaction. To resolve this issue, the TikTok user must first check the accuracy of his/her delivery address before proceeding to make TikTok Shop Cash On Delivery transaction.
Third, the destination or delivery address can be outside the delivery service coverage. TikTok Shop Cash On Delivery is implemented and applied only within areas that are specified to be covered by the feature. TikTok Shop may still be in the process of extending its delivery coverage to include the area where the customer is residing. To resolve this issue, a second delivery address could be enrolled (within the delivery service area). The customer can make arrangements to make Cash On Delivery be completed at such an address.
Lastly, the TikTok Shop Cash On Delivery feature may not be useful because the item to be purchased exceeds the maximum price set by TikTok Shop for the Cash On Delivery feature. Per country or market, TikTok Shop observes and implements a maximum price on goods sold through the feature. This is the reason many costly items like electronic gadgets, smartphones, large furniture, and jewelry are not usually covered by the TikTok Shop Cash On Delivery feature. To buy such items via TikTok Shop, other applicable payment options could be used.
TikTok Shop Cash On Delivery Advantages
There are several advantages of Cash On Demand payment, making it a preferred payment method in many markets in the region. Those advantages may also be the reasons why TikTok Shop is implementing the feature as an available option for transactions.
For the customer, Cash On Delivery enables him/her to make cash payments only upon delivery or receipt of the product. This gives them the benefit of eliminating the risk of losing money. A customer will only pay for a delivered item. Thus, no payment can be lost whatever happens to the item to be delivered. When using credit cards or e-wallets, there is a risk when the item is not delivered. It would be tedious to process complaints for paid but undelivered merchandise, whether on TikTok Shop or any other e-commerce platform.
Second, many customers in suburban or rural areas may not own credit or debit cards (for practical reasons). A lot of customers in remote areas may also decide to remain unbanked for personal and security reasons. TikTok Shop Cash On Delivery enables them to enjoy shopping fully via TikTok Shop. Many customers need not be forced to get a credit or debit card just to make TikTok Shop purchases.
Third, TikTok Shop Cash On Delivery is an effective option to prevent online payment frauds, which may abound, especially these days. This payment option does not require divulging of financial information—including credit/debit card, bank, or e-wallet details, which may possibly be intercepted or accessed by talented scammers and cyber hackers in the online space. This could practically be the best and most popular reason many customers prefer to pay Cash On Delivery, although many credit card firms and banks have also stepped up security features to safeguard payment transactions online.
On the side of businesses or merchants, TikTok Shop Cash On Delivery is also advantageous because it is a sure way to bolster the cash flow. The payment option, which is preferred in many regional markets, may prompt customers to place orders for more items than usual. This will reflect positively on the merchant’s sales. This is also the reason many TikTok Shop sellers or merchants are making sure they offer the Cash On Delivery payment option to customers all year round, especially if they aim to always please their customers.
TikTok Shop Cash On Delivery Disadvantages
In general, Cash On Delivery is much riskier to merchants than to customers for obvious and practical reasons. This is because the merchant is usually the one initially taking the costs of the delivery transactions. There is also no guarantee that the customer will receive and pay for the item. In many and inevitable cases, a customer can refuse to accept and pay for merchandise if there was an error in shipping if the product delivered is not the one ordered, if the size or variant is not what was indicated upon ordering, or if the item delivered is damaged upon handling.
Another cause of loss from Cash On Delivery is when a customer decides to return the product to the merchant because of the reasons previously enumerated. This means the merchant will have to shoulder additional costs for shipment of the item back to his/her address and sending the right one to the customer’s address again.
Fraud is also rampant on the part of the customers. There have been reported cases wherein a customer is clueless about the item being delivered. Some unscrupulous individuals may create false or “poser” accounts to order items from TikTok Shop for Cash On Delivery. This is why verification of the authenticity of customer information upon activation of TikTok Shop is very important.
During peak shopping seasons, customers can also have trouble placing orders for Cash On Delivery payment options. This is because the volume of orders from other customers can significantly increase, leading to possible longer delivery commitments or worse, running out of stock for preferred items (and variants). This can be a source of frustration and a bad customer experience.
On some occasions, a customer may not have enough cash to pay for the item upon delivery. This may happen especially when the delivery date gets earlier or later than stipulated in the check-out process transaction. Thus, the delivery person may end up waiting for the customer to go out and return for ATM withdrawals. There are also rare cases when the delivery personnel run out of change for a significantly huge bill handed as payment.
At times, the delivery may arrive at times when the customer is out doing errands. This will entail returning to the delivery address later, or worse, on another day—an occurrence that may increase the shipping cost. There are cases when a customer suddenly makes an abrupt out-of-town trip during the delivery date. This is a problem when no one can be left at home to receive and pay for the ordered goods.
TikTok Shop Cash On Delivery comes with its own set of advantages and disadvantages on the side of both the merchant and the customer. However, e-commerce platforms, businesses, merchants, and sellers should always remember that this payment option guarantees opportunities that make online shopping via TikTok Shop more appealing to more TikTok users and e-commerce customers.
On the side of customers, not carrying any debt is a convenience that can easily draw them to online shopping via TikTok Shop. For merchants, the payment option can entice customers to order more and place orders more often, which leads to higher sales. They can opt to charge a delivery fee that can outweigh the costs of delivery that has no guarantee of turning into an actual sale.