TikTok has officially launched its e-commerce business, known as TikTok Shop, in the US following months of testing, according to a blog post from the company published on Tuesday. TikTok is making a big bet on monetizing its more than 150 million users in the country, even as it faces increased scrutiny from US authorities.
Why it matters: The largest market for the short video platform, the US also represents the greatest political risk for the Chinese-founded company. TikTok will also encounter stiff competition from larger e-commerce rivals such as Amazon and from Chinese counterparts such as Shein and PDD-owned Temu.
Details: The shopping feature now enables TikTok’s US users to directly complete transactions through in-app links within videos or live streamings, eliminating the need to jump to external websites.
- More than 200,000 merchants have already signed up to sell goods on TikTok Shop during a nearly one-year testing period, with brands such as L’Oréal, Benefit, and Olay either already on board or planning to join TikTok Shop, according to Chinese media outlet Jiemian.
- TikTok offers various features to support content creators, brands, and merchants in enhancing their sales experiences. One such feature allows sellers to collaborate with creators through commission-based partnerships, all within the TikTok ecosystem. TikTok said that more than 100,000 creators have already registered for the Affiliate Program.
- While data privacy remains one of TikTok’s biggest challenges in the US, the company emphasized in the blog post that US user data is protected and stored in the country and managed by the US Department of State (USDS). Payment information for users in the States is also managed by USDS, as TikTok is committed to providing “a safe and secure environment,” the post stated.
Context: TikTok’s e-commerce push was first launched in Indonesia in 2021, and has since been made available in the UK and multiple countries in Southeast Asia. A previous Bloomberg report noted that TikTok plans to quadruple its e-commerce merchandise sales to $20 billion by the end of this year.
- More than half of US states have banned the use of TikTok on government-issued devices, as the country’s officials and lawmakers have continuously expressed their concerns over the ByteDance-owned app’s sharing of user data in recent years. A US House committee voted in March to give President Joe Biden the power to ban TikTok, but a Reuters report last month said the bill had stalled in Congress.