US Shoppers Flock to TikTok Shop’s E-Commerce Offering
- US TikTok users have been splurging this holiday season to buy goods from a wide variety of sellers on the TikTok Shop e-commerce platform, according to TikTok estimates and a Reuters analysis.
- Data indicates that TikTok Shop, newly launched in the US as of September 2023, has gained substantial market share in e-commerce in a crucial moment.
TikTok Shop’s Impressive Black Friday Performance
- On Black Friday, the day after Thanksgiving, when American consumers splurge on online shopping, TikTok Shop reportedly reached $100 million in sales.
- The company had also previously said that the number of people buying goods on TikTok Shop each month had almost tripled.
Uncertain Future for TikTok Shop Amid Potential TikTok Ban
- A US federal appeals court recently upheld a law requiring Chinese-based ByteDance to divest TikTok in the US by early next year or face a ban.
- If TikTok is banned, it could also extend to the TikTok Shop e-commerce platform, which is deeply integrated with the social media app.
Competitive Landscape and Merchant Strategies on TikTok Shop
- Similar to its competitors Shein and Temu, TikTok Shop features goods from independent sellers, some of whom import goods from China, and engages in price wars.
- TikTok Shop merchants usually use sponsored “influencers” and advertisements to promote their goods to the 170 million US users of TikTok.
- One of the platform’s features, “LIVE,” enables live video streaming from which customers can make direct purchases of products.
Consumer Experiences with TikTok Shop
- Jasmine Whaley, a 31-year-old from York, Pennsylvania, has spent almost $700 on the TikTok Shop platform this year after seeing videos from influencers and advertisers about merchandise.
- Whaley believes TikTok has “cracked the code” on curating content and products that she likes, and her TikTok Shop orders are often delivered to her more quickly than orders she places on Amazon.
TikTok Shop’s Market Impact and Future Outlook
- In the seven days preceding Cyber Monday, December 2, US spending on TikTok Shop surpassed expenditure on Shein and Temu, according to third-party data firm Facteus.
- With TikTok Shop being a “new distribution channel” and businesses “doing really well on it,” Erik Huberman, CEO of marketing firm Hawke Media, stated that there is no obvious substitute in the event that the platform is blocked.
The surge in US consumer spending on TikTok Shop during the holiday season highlights the platform’s growing influence in the e-commerce landscape. However, the looming threat of a potential TikTok ban casts uncertainty over the future of this emerging sales channel, leaving merchants and shoppers alike in a state of anticipation.