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SHENZHEN, China (Reuters) – Chinese e-commerce merchants who want to sell their products on the U.S. TikTok Shop instead of Amazon say the short video app will tighten enforcement of rules for overseas sellers to open stores. He is outraged by the move. Shop on the platform.
Chinese-owned TikTok, which faces the threat of being banned unless it sells its U.S. operations, has changed its internal regulations in recent weeks, according to an industry group representing five Chinese vendors on the site and 3,000 Chinese employees. The government is said to be taking a stricter stance toward enforcement. A store that sells products online.
TikTok requires sellers to register a U.S. entity that is 51% U.S.-owned and chaired by a U.S. passport holder, according to sellers and the Shenzhen Cross-Border E-Commerce Association, China's largest manufacturing hub. This was announced by Winnie Wang, executive chairman of the Seller Association. .
Many Chinese sellers have used US entities to be recognized as US sellers on the platform, but regulations require them to re-register as international sellers, resulting in less visibility and support. , says it is at a disadvantage compared to TikTok in the United States. seller.
TikTok, used by about 170 million Americans, has sought to strike the right balance between pursuing rapid growth and managing regulatory risk.
The U.S. move to ban the platform adds to rhetoric that it will siphon billions from the pockets of creators and small businesses, and at the same time the signing will leave bigger rivals such as Shein and PDD Holdings' Temu trying to catch up. Please add more merchants.
A TikTok spokesperson said the company has clear policies and requirements for all sellers on the Shop, including international sellers, and these have not changed since TikTok Shop was introduced in the U.S. in September 2023. No, he said.
“TikTok maintains strong policies to protect our customers and promote a trusted shopping environment, and we are continually strengthening how we enforce our rules,” the spokesperson said. He did not comment specifically on whether the name recognition of sellers would decline.
Vendors in China feel targeted by TikTok's rules, and some are considering reducing the resources they devote to promoting on the platform and finding U.S. partners. Stated.
“We're rethinking how much time and resources we put into this,” said Jackie Bai, a Shenzhen-based e-commerce seller.
He and another seller said that Amazon, by comparison, does not differentiate between U.S. and other sellers on its platform, and that all sellers have access to the company's Seller Central and compete on a level playing field. said.
Amazon did not respond to a request for comment.
Bai and two other China-based sellers said they heard from TikTok shop representatives that the tightened rules are a response to the political sensitivities TikTok faces in the US during an election year. Ta. TikTok declined to comment.
U.S. authorities have criticized the app's security and privacy and suggested user data may be shared with the Chinese government, but TikTok says the company has never shared U.S. user data with the Chinese government and has never shared it. He said he had never received a request.
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Chinese vendors selling products ranging from beauty products to clothing and home goods have rapidly increased their presence on ByteDance's TikTok shopping platform in the months since its launch in the United States.
“Almost every consumer technology company I know that is based in China, and every Chinese consumer technology company that we serve, sells on TikTok and sells on TikTok. “Companies that don't have one are considering when and how to start selling on TikTok,” said CEO Chris Pereira. Impact of Business Consulting Group.
According to estimates from data provider YipitData, TikTok's U.S. stores recorded $1.67 billion in total sales from its opening in September 2023 to the end of the year.
TikTok said it does not disclose its revenue and did not respond to inquiries about the accuracy of YipitData's estimates.
Sellers said they were looking for an alternative channel to dominant e-commerce giant Amazon, and subsidized shipping costs were also an attraction.
About 50% of sellers on Amazon Marketplace are Chinese, with most of them concentrated in Shenzhen, Wang said.
These vendors, typically small and medium-sized businesses, submit applications to create “digital storefronts” and pay fees to the platform to advertise and distribute services and products in their accounts.
Bai opened a US TikTok shop in October that primarily sells underwear, and said the platform was already generating 20% of its revenue by the end of February.
He declined to name his business or product for fear of retaliation from the platform, but said his TikTok store flourished after hiring American actors to promote its products.
Bai said he was told by a TikTok sales representative this month that because he is a Chinese citizen, he would have to close down his U.S.-based entity and re-register as an international seller.
Bai is currently reconsidering his strategy and is looking for a local partner as he believes this will put him at a disadvantage against competing sellers.
“Because the TikTok shop is so new, our internal rules change weekly and are particularly strict,” he said.
(Reporting by David Kirton in Shenzhen; Additional reporting by Casey Hall in Shanghai; Editing by Brenda Goh and Jamie Freed)
