TikTok Takes Aim at Amazon with $17.5B US E-commerce Move
ByteDance, the present company of social media platform TikTok has set its sights on the $17.5 billion US e-commerce market. According to sources, the company is reviewing a plan for a US version of the TikTok Shop, which includes online entertainment with impulse buying. The goal for the merchandise volume of the US version of TikTok Shop is set at $15 billion by 2024.
GIF source SociallyIn Blog on Google
This expansion plan puts TikTok in direct competition with US retail giant Amazon and other Chinese seller platforms such as Shein and Temu . However, TikTok's extensive social media outreach and viral allure are expected to help it capture the market.
Initially, the company had aimed to collect around $20 billion in global merchandise value last year, primarily driven by Southeast Asia. But now, ByteDance is focusing on boostingh sales in the US and Latin America instead.
The shift in focus and global expansion plans reflect the company's strategic intent to diversify and expand its revenue streams.
TikTok Shop's unique feature allows users to purchase items while browsing through short videos and live streams within the primary social media app. This shopping format aims to integrate Amazon's shopping convenience with the product discovery element synonymous with apps such as Instagram.
GIF source TechCrunch on Google
To solidify its e-commerce, TikTok in the US has also begun offering incentives such as free shipping and support to influencers endorsing various products you can see and buy through videos and live streams.
The recent announcement of an upcoming increase in merchant fees to 6% per sale from April, further rising 8% in July across most product categories, signifies a shift towards revenue generation. Apart from these increments, TikTok's commissions remain notably lower than Amazon's typical seller fees, which hover around 15%.
TikTok is stretching the boundaries into global online shopping by buying Tokopedia in Indonesia for $1.5 billion. This move helps TikTok get back into selling stuff online thereafter dealing with some rules. They are not saying how much they want to sell in other places yet, which makes us wonder what else they are planning after getting into the US.
