According to people who asked not to be identified because they were discussing private information, the 2024 merchandise volume goal for the US version of TikTok Shop, which combines online entertainment with impulse buying, was discussed in recent internal meetings and may still change depending on how the business goes.
TikTok’s aggressive goal puts it in conflict with Amazon as well as other Chinese-owned companies Temu and Shein, who have been gaining significant traction with younger American consumers. In contrast to its two competitors, TikTok relies on the popularity of its viral videos and its social media presence to attract customers.
According to Bloomberg News, TikTok was expected to reach a global gross merchandise value of around $20 billion last year, with the majority of its platform revenues coming from Southeast Asia. According to two sources with knowledge of the situation, the firm is currently looking to increase sales in the US and Latin America, where it intends to start an online store in the upcoming months.
TikTok released a statement stating, “The speculated US merchandise sales figures represented by Bloomberg are inaccurate.”
Established over ten years ago by Zhang Yiming and Liang Rubo, the company has amassed a net value of over $200 billion, mostly due to the popularity of short-video platforms like Douyin and TikTok. One of the aspects that the closely held firm located in Beijing is developing the quickest is TikTok Shop. The company is looking for a new development engine that goes beyond social media advertising. In 2023, ByteDance’s sales climbed by around 30% to over $110 billion, surpassing the anticipated growth of its more established competitors in the social media space, Meta Platforms Inc. and Tencent Holdings Ltd.
Within its primary social media app, TikTok Shop allows users to purchase goods while browsing through an endless feed of brief videos and live streams. The company hopes that customers will use TikTok Shop as a substitute for Amazon or Sea Ltd.’s Shopee. Douyin has already managed to steal a sizeable chunk of Chinese consumer spending from Alibaba Group Holding Ltd. and JD.com Inc. thanks to this format, which aims to combine the simplicity of Amazon shopping with the opportunity for product discovery provided by apps like Meta’s Instagram. This is especially true after the pandemic’s lockdown regulations encouraged people to spend more time online.
intends to distribute its e-commerce concept around the world. TikTok provides free delivery and financial support to influencers in the US who use videos and live streams to promote electronics, clothing, and cosmetics. According to the firm, more than 5 million new US consumers purchased something on TikTok in November thanks to Black Friday and Cyber Monday sales. In the nation, there are about 150 million users of it.
TikTok stated on Wednesday that it will stop using discounts to encourage sellers and raise fees imposed on merchants to 6% of each sale starting in April and to 8% in July in the majority of product categories. Although those commissions are still far less than the average 15% selling fees on Amazon, the hike suggests TikTok
Chinese e-commerce applications, such as the well-known fashion website Shein and PDD Holdings Inc.’s Temu, which has become immensely famous after running a Super Bowl commercial in February, are becoming more and more comfortable for American consumers to purchase on.
What sales goals TikTok Shop has set for itself and other markets is unknown. In a $1.5 billion agreement, TikTok acquired GoTo Group’s Indonesian e-commerce division Tokopedia, enabling the company to relaunch its online retail business following months of regulatory inspection.