How Cross - border E - commerce Enterprises Leverage DTC (TikTok/Google) to Mitigate Tariff Costs: A Case Study

1. Background In the complex world of cross - border e - commerce, tariff costs pose a significant challenge. Tariffs can eat into profit margins and make products less competitive in foreign markets. However, the emergence of DTC (Direct - to - Consumer) models through platforms like TikTok and Google has presented new opportunities for cross - border e - commerce enterprises to address this issue. The DTC model allows companies to bypass some of the traditional intermediaries in the supply chain. By selling directly to consumers, these enterprises can potentially reduce costs associated with multiple layers of distribution. Moreover, TikTok and Google offer unique advantages. TikTok, with its massive global user base and highly engaging short - form video content, has become a powerful marketing tool. Google, on the other hand, provides extensive reach through search engines and various advertising platforms. 2. Case Let's take the example of a small but growing cross - border e - commerce company that specializes in selling unique handmade jewelry. Before adopting the DTC approach on TikTok and Google, the company faced high tariff costs when exporting to certain European countries. The company first established a DTC strategy on TikTok. They created a series of engaging videos showcasing the making process of their jewelry, the stories behind the designs, and the quality of the materials used. These videos quickly attracted a large number of followers. By leveraging TikTok's e - commerce features, they were able to directly sell their products to consumers in Europe. Simultaneously, they used Google Ads to target potential customers who were searching for unique jewelry items. By optimizing their website for Google search and using relevant keywords, they increased their visibility. As a result of these DTC efforts, they were able to re - evaluate their supply chain. Instead of using large - scale distribution centers in Europe that were subject to high tariffs, they set up smaller, more targeted fulfillment centers closer to major customer bases. This allowed them to reduce the overall cost of goods sold, including tariff costs. For example, previously, when they shipped products through traditional channels, the tariff rate on their jewelry was around 10% of the product value. After implementing the DTC model, they were able to restructure their shipping and fulfillment in such a way that the effective tariff rate decreased to around 5% of the product value. 3. Experience and Lessons 3.1 Marketing and Brand Building The case shows that effective marketing on DTC platforms is crucial. Through engaging content on TikTok, the company was able to build a brand image that attracted customers directly. This emphasizes the need for cross - border e - commerce enterprises to invest in content creation and storytelling. They need to showcase the unique value of their products in a way that resonates with global consumers. 3.2 Supply Chain Optimization Another important lesson is the ability to optimize the supply chain. With the DTC model, companies have more flexibility to design their supply chain according to the actual demand and cost - benefit analysis. They can avoid high - tariff areas and choose more cost - effective fulfillment methods. 3.3 Platform Utilization It is also evident that a comprehensive understanding and utilization of the features of platforms like TikTok and Google are essential. Different features such as TikTok's video promotion algorithms and Google's search algorithms need to be mastered to maximize the effectiveness of DTC strategies. 4. Summary In conclusion, cross - border e - commerce enterprises can effectively leverage DTC models on platforms like TikTok and Google to mitigate tariff costs. The case study of the jewelry company demonstrates the potential benefits in terms of both marketing and supply chain optimization. By learning from the experiences and lessons, other cross - border e - commerce companies can also explore and implement DTC strategies to improve their competitiveness in the global market. However, it is important to note that success in DTC requires continuous adaptation to the evolving features of these platforms, as well as a deep understanding of global consumer behavior and market trends.