Will 2024 be the year that shopping becomes TikTok's core business?According to a new report from BloombergWhat TikTok is paying attention to is: 10x increase Product sales in the U.S. totaled $17.5 million this year. In addition to strong competition from Amazon, the short video platform will face stiff competition from Chinese startups Temu and SHEIN, which have expanded aggressively in 2023. If TikTok wants to reach anything close to that, it will be important to replicate its success in Southeast Asia in the U.S. market. It dethrones a giant in this field.
In order to achieve the expected rapid increase in product volume, TikTok uses the world's best algorithm to focus your attention on in-app shopping features. Launched in the US in September 2023, TikTok Shop allows users to seamlessly browse and purchase products promoted by creators on their content feed. For now, it's mostly clothing and beauty products, as reflected in the most popular content categories across social media.
TikTok also announced Merchant transaction fees for most product types will increase to 6% in April In July, it will reach 8%, up from the current 2%. This will put pressure on sellers' profit margins, but these fees are still significantly lower than Amazon's fees.
It's too early to say how TikTok's ambitious 2024 goals will compare to last year's sales. Financial numbers for the full year starting in 2024 have not yet been released, but Bloomberg previously said TikTok is expected to generate about $20 billion in global gross merchandise value for the year, with Southeast Asia contributing the bulk of that. I was guessing. We also know that TikTok probably caused him to lose close to $500 million by launching his TikTok Shop in the US. This is expected to provide the much-needed foundation for profitability in the year ahead.
