TikTok, owned by ByteDance, eyes a tenfold surge in its US e-commerce business, targeting $17.5 billion in 2024. This ambitious goal intensifies competition with Amazon, as TikTok leverages its unique blend of entertainment and e-commerce through TikTok Shop. The platform’s global expansion, increased merchant fees, and growing user base position TikTok as a formidable player in the evolving e-commerce landscape.
6 January 2024 – TikTok, owned by ByteDance Ltd., is reportedly aiming to propel the size of its US e-commerce business to an ambitious $17.5 billion in 2024, marking a tenfold growth, according to insiders. The goal, discussed in internal meetings, sets the stage for a significant clash with Amazon, as TikTok leverages its unique blend of online entertainment and impulse buying through its TikTok Shop feature.
TikTok Shop, characterized by a seamless integration of short videos and live streams with e-commerce, hopes to lure buyers with its social media reach and the popularity of viral content. This aggressive target also puts TikTok in competition with Chinese counterparts Temu and Shein, both making substantial inroads among younger American shoppers.
While TikTok was on track to amass around $20 billion in global gross merchandise value last year, primarily driven by Southeast Asia, the focus is now on expanding sales in the US and Latin America. TikTok Shop, designed to offer an alternative to platforms like Amazon and Sea Ltd’s Shopee, has gained traction, especially during pandemic-driven lockdowns.
ByteDance, valued at over $200 billion, is seeking a new growth driver beyond social media advertising. TikTok Shop’s popularity, allowing users to shop while browsing short videos, has been pivotal in challenging established players like Alibaba and JD.com in the Chinese market.
TikTok’s global expansion of its e-commerce model includes the US, where it offers free shipping and subsidies to influencers promoting various products. The platform, with approximately 150 million users in the US, witnessed a surge in new customers during Black Friday and Cyber Monday, reflecting its growing influence.
To generate revenue from its e-commerce platform, TikTok has announced an increase in fees imposed on merchants, reaching 6% of each sale starting in April and escalating to 8% in July for most product categories. While still lower than Amazon seller fees, this move underscores TikTok’s commitment to monetizing its e-commerce operations.
As American consumers increasingly embrace shopping on Chinese e-commerce apps, TikTok’s foray into this space positions it as a formidable player, challenging established norms and reshaping the competitive landscape. – ref: The Edge Malaysia
