TikTok plans to quadruple its global e-commerce operations, aiming to sell $20 billion worth of merchandise.
The ByteDance-owned social media app will rely heavily on rapid growth in Southeast Asia to reach its optimistic goal. TikTok also expects to increase sales in the US and Europe, Bloomberg reported
Why we care: TikTok had the highest app store spending in the US, UK, France, Germany and Indonesia in Q1 2023, according to Data.ai. Partnering with the social media giant could not only help advertisers reach a large audience on the world’s most addictive social app, but also a consumer base more likely to spend, potentially leading to conversions higher
How it works? TikTok Shop shows ads to users in its main social media app as they scroll through an endless feed of short video clips and live streams. The business model, which combines entertainment with impulse buying, has already helped Douyin (TikTok’s sister app) establish itself as a major e-commerce player in China, competing with Amazon and Shopee , a success he hopes to repeat in the US.
why now. Revenue from TikTok’s advertising business, which has historically been its main source of revenue, is declining due to a global slowdown in ad sales. Therefore, the application is focusing its efforts on doing so 17 trillion dollars Online e-commerce is their main revenue driver.
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Is TikTok banned in the US? The state of Montana is imposing a ban on TikTok downloads starting next year. Lawmakers in other states have also proposed similar bills for a nationwide ban in the United States, but a final decision has yet to be made by President Joe Biden.
TikTok fighting a possible US ban. TikTok has 150 million US users and is actively taking steps to prevent the ban, including introducing a number of security measures to address national security concerns raised by US politicians. It is giving partners like Oracle Corp. the right to review its technology and cordon off the data of American TikTokers.
What TikTok said. TikTok has declined to comment on its e-commerce plans. However, the social network released a statement about its future in the US:
“A US ban on TikTok is a ban on the export of American culture and values to the more than one billion people who use our service around the world. We are disappointed to see this fast-tracked law move forward , despite its considerable negative impact on the free speech rights of millions of Americans who use and love TikTok.”
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