ByteDance-owned TikTok has major aspirations for the e-commerce market in the US, and plans to take on Amazon, Shein, Temu and others.
ByteDance-owned TikTok is eyeing a lion’s share in the e-commerce market in the US, and has an ambitious goal of increasing merchandise shipment to $17.5 bn in 2024, as reported by the South China Morning Sea.
This move places TikTok in direct competition with e-commerce giants like Amazon and fellow Chinese-owned retailers Temu and Shein, which have gained traction among younger American consumers.
The 2024 merchandise volume objective for TikTok Shop in the US, known for merging online entertainment with impulsive buying, was discussed in internal meetings recently, and though subject to change based on business performance, signals the platform’s determination to expand its influence.
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Unlike its budget retail counterparts, TikTok relies on its extensive social media reach and the allure of viral videos to attract buyers.
While Bloomberg News reported that TikTok was on track to achieve approximately $20 billion in global gross merchandise value last year, primarily driven by Southeast Asia, the company is now redirecting its focus to expand sales across the US and Latin America.
TikTok Shop allows users to make purchases while browsing through a continuous stream of short videos and live streams within the main social media app, aiming to position itself as an alternative to platforms like Amazon and Shopee.
ByteDance, the internet giant founded by Zhang Yiming and Liang Rubo, is seeking new avenues for growth beyond social media advertising, with TikTok Shop emerging as one of its fastest-growing features. ByteDance’s revenue surged around 30 per cent in 2023, surpassing the growth of more established social media rivals Meta Platforms and Tencent Holdings.
TikTok’s e-commerce model, which combines shopping convenience with product discovery through videos, has already proven successful in China with its counterpart Douyin.
Now, TikTok is exporting this model globally, offering free shipping and subsidies to influencers in the US. The platform recently announced fee increases for merchants, marking a shift towards generating more revenue from its e-commerce platform.
With Americans showing increasing comfort in shopping on Chinese e-commerce apps, TikTok’s aggressive expansion into the US market seeks to tap into the growing trend. While specific global and market-specific sales targets for TikTok Shop remain unclear, the platform’s move to assert dominance in the US underscores ByteDance’s commitment to establishing TikTok as a major player in the e-commerce space.
(With inputs from agencies)