TikTok could launch an online retail store in the United States as early as next month, according to reports.
The e-commerce store would sell goods from China, allowing the company to compete in the e-commerce segment. Amazon, Shein, and Temu would be the major competitors for the newly conceived ‘TikTok Shop.’ The report from Semafor suggests TikTok’s store will sell kitchen gadgets, toys, and other household items. These items would appear in the TikTok Shop tab, which currently exists in the app with businesses paying a commission to sell their products to TikTok’s user base.
TikTok’s means of breaking into the e-commerce market in the United States is still developing. It launched TikTok Shop in November 2022, but the platform has yet to gain significant traction. TikTok is also experimenting with something it calls ‘Trendy Beat’ in the U.K. Products are sold and shipped by a Singapore-based company owned by ByteDance. TechCrunch spotted a trademark application for the ‘Trendy Beat’ feature in the United States, so this is likely an extension of the U.K. test.
E-commerce is wildly successful for TikTok in Asia, where the industry at large is growing at astronomic rates. Southeast Asia, in particular, is a hot spot for the company. TikTok is aiming to quadruple the size of its e-commerce venture to $20 billion in gross merchandise value for 2023, compared to just $4.4 billion in sales last year.
“It’s very, very difficult to make either European consumers or North American consumers purchase from these social networks,” Forrester Research analyst Sucharita Kodali told Yahoo Finance. “That’s just not how we shop, it may be a little bit of how we discover, but it’s not how we buy.”
The e-commerce market in the United States is already well-saturated with established players. Even brick-and-mortar retail giant Walmart struggled to get its e-commerce business off the ground after Amazon had dominated the landscape for so long. It took purchasing an e-commerce retailer and adapting its business to Walmart’s needs. It’s also hard to get consumers to care about buying items from an untested store—especially if they’re items they can get elsewhere. TikTok is facing an uphill challenge in these markets, especially with its regulatory scrutiny.