TikTok, the social media behemoth, has officially unveiled its e-commerce venture, known as TikTok Shop, in the United States. This move follows months of testing and represents a significant wager on monetising its extensive user base of over 150 million Americans, even as it grapples with heightened scrutiny from US regulatory authorities.
The United States stands as the largest market for the short video platform, but it also poses the most substantial political risk for the Chinese-founded company. Furthermore, TikTok will face formidable competition from established e-commerce giants like Amazon and Chinese counterparts such as Shein and PDD-owned Temu.
The TikTok Shop empowers US users to complete transactions directly through in-app links within videos or live streams, streamlining the shopping process without the need for external websites.
Over 200,000 merchants have already registered to sell their products on TikTok Shop during nearly a year of testing. Renowned brands like L’Oréal, Benefit, and Olay have either already joined or have plans to participate in TikTok’s e-commerce venture.
TikTok offers a range of features to enhance sales experiences for content creators, brands, and merchants. One noteworthy feature enables sellers to engage in commission-based partnerships with creators, all within the TikTok ecosystem. Over 100,000 creators have already enrolled in the Affiliate Program.
Despite ongoing concerns about data privacy, TikTok asserts that US user data is safeguarded and stored within the country, managed by the US Department of State (USDS). Payment information for US users is also overseen by USDS, underlining TikTok’s commitment to providing a secure environment for its users.
TikTok initially introduced its e-commerce initiative in Indonesia in 2021 and subsequently expanded it to the UK and several Southeast Asian nations. A report earlier noted TikTok’s ambition to quadruple e-commerce merchandise sales to $20 billion by year-end.
More than half of US states have prohibited the use of TikTok on government-issued devices, reflecting widespread concerns among US officials and lawmakers regarding the app’s handling of user data in recent years. In March, a US House committee voted to grant President Joe Biden the authority to ban TikTok, although a report last month indicated that the bill had stalled in Congress.