Short-form video giant TikTok is aiming to significantly expand its U.S. e-commerce business, aiming to increase its gross merchandise value tenfold this year to $17.5 billion.
This goal has been discussed in company meetings in recent weeks and is still subject to change as the business evolves. bloomberg reported on Thursday (January 4), citing a person familiar with the matter.
This ambitious goal puts TikTok on a collision course not only with e-commerce giants Amazon.comas well as with fast-growing Chinese players such as: tem and Shanehas proven popular among young American shoppers.
Its unique format combines the ease of use of Amazon with the discovery power of platforms such as: Instagrama model that has been successful in China, where the parent company is based part time dance.
Unlike its discount rivals, TikTok aims to lure buyers through engaging video content and live streams, blurring the line between entertainment and impulse purchases.
TikTok has expanded into e-commerce in recent years with a series of experiments. Even before the platform introduced e-commerce capabilities, creators were increasing sales by showcasing products organically and driving users to external purchasing channels.
Brand partnerships started using hashtags like #Make and buy TikTokhighlighting the power of platforms to influence purchasing decisions.
In 2020, TikTok began testing. “buy now” Added an influencer video button and partnered with an e-commerce platform in the same year Shopify We will begin offering in-app shopping functionality.
Since then, TikTok's e-commerce services have expanded to features such as livestreams with product links.China saw an initial boom in live streaming e-commerce through TikTok's sister apps Doonis a pioneer in livestream shopping with influencer recommendations and real-time purchasing.
In 2019, new yorker Journalist Jia Tolentino wrote that “Douyin remains largely similar to TikTok, but is more advanced than its global counterparts, especially when it comes to e-commerce.”
“With just three taps on Douyin, you can buy the products featured in the video. After watching the video shot at the hotel, you can book a stay at the hotel. Take a virtual tour of the city's stores and restaurants. You can participate, get coupons for those establishments, and post geo-tagged video reviews later.”
In China, Douyin has gained significant market share. alibaba and JD.com.
TikTok is TikTok shop TikTok will launch in select markets including Southeast Asia and the UK in December 2021. In June 2023, TikTok hinted that it plans to invest billions of dollars in Southeast Asia, making it not only a popular social media app but also an e-commerce powerhouse.
TikTok launched its shopping feature in the U.S. in September 2023 after several months of testing. This feature now allows brands, sellers, and creators to sell directly through shoppable content on the TikTok app.
TikTok said at the time: “TikTok Shop enables brands and creators to connect with engaged customers based on their interests, combining the power of community, creativity, and commerce to deliver a seamless shopping experience.”
Very recently, bloomberg TikTok aims to further increase its sales in the United States and launch an e-commerce business in Latin America in the coming months, the company reported.Last year, TikTok was approx. 20 billion dollars Southeast Asia accounts for the largest share of global sales.
But TikTok said bloomberg The statement said, “U.S. merchandise sales estimates are bloomberg is inaccurate. ”
TikTok is reportedly planning to increase sales fees starting in 2020. 2% to 6% stare April 1st. information They report that the platform will further increase prices on many items. 8%effective July 1.
In certain categories, TikTok's recently revised fees are still lower than Amazon's fees, but Amazon's fees have been driven down by competition from platforms like Shein and Temu. The report also cites sources saying that TikTok Shop's seller subsidies are being reduced following rough measures. 500 million dollars Losses incurred last year.
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