TikTok is reportedly gearing up to launch an e-commerce business that will allow U.S. consumers to purchase made-in-China products directly from the popular social media platform.
TikTok Ventures into E-Commerce with Its Own Business
The marketplace at the core of the platform is called the “TikTok Shop Shopping Center,” and it seems that the name is intentional and not a typo.
The Wall Street Journal reports that TikTok will expand its TikTok Shop program, allowing users to shop directly from Lives, creator or brand profiles, and videos. However, unlike before, where TikTok only served as a marketplace, the e-commerce giant will now be the retailer of products. This means they will take care of everything from purchasing products from suppliers to marketing, storing, and distributing the items.
According to a report from The Wall Street Journal, TikTok may launch its e-commerce business as early as August. The social media platform is looking to compete with successful Chinese companies like Shein and Temu in the American marketplace. This move towards e-commerce will also provide TikTok with a more diversified revenue stream, moving away from just advertising.
Recently, it was announced that a new shopping feature called “Trendy Beat” is being tested in the United Kingdom. The products are shipped by a Singapore-based company owned by ByteDance, the parent company of TikTok. At first, TikTok denied that the new e-commerce feature was being tested in the United States. However, TechCrunch discovered that the company had filed a trademark application for Trendy Beat in the U.S., indicating that the feature may soon be available on the U.S. version of the app.
In the U.S., TikTok’s e-commerce strategy is still in its early stages. TikTok Shop has been in testing since November of last year and has yet to gain significant traction. This may be why Trendy Beat was not tested in the U.S. market until now.
TikTok’s e-commerce arm has succeeded in Asia, particularly in the rapidly growing industry. The company is looking to expand its business in Southeast Asia, with the goal of increasing its e-commerce venture to up to $20 billion in gross merchandise value by 2023, compared to last year’s $4.4 billion in sales, per Bloomberg. This move is considered a strategic investment for TikTok, as the company seeks to capitalize on the region’s economic growth.
Would TikTok users not be interested in conveniently purchasing clothes through the app? Furthermore, can we not expect an increase in OOTD videos featuring products solely from our platform with this move?