TikTok, the popular video platform, is gearing up to enter the US e-commerce market in the coming month, as revealed by The Wall Street Journal. Similar to Amazon’s “Sold by Amazon” program, it’s online marketplace will showcase an array of products sourced from Chinese sellers, spanning clothing, kitchen gadgets, and electronics.
Outside the US, TikTok has already introduced shopping and live shopping features in several countries.
TikTok’s “TikTok Shop Shopping Center” will feature distinct channels, offering users an opportunity to explore and purchase various items. According to the WSJ report, TikTok will handle all aspects of the shopping process, from marketing and transactions to logistics and after-sale services. Users will also have the option to leave reviews for products shipped by TikTok and external sellers.
This move into e-commerce has been the subject of speculation for some time. A previous report in June from Semafor suggested that it would integrate its online marketplace directly into the app, creating an e-commerce tab for users.
As per the WSJ report, TikTok will adopt a payment strategy where it pays Chinese suppliers only after securing buyers in the US. This approach aims to mitigate risks by avoiding unsold inventory. Furthermore, the company plans to extend the program to include merchants beyond China, while concurrently developing an “international settlement and logistics system.”
However, the launch of it’s online marketplace in the US has faced delays. While Semafor initially predicted a launch this month, It decided to postpone. Chinese retailers are concerned about the app’s future in the US, particularly with Montana enacting a law that will ban it next year, and federal lawmakers pushing for a nationwide ban.
TikTok’s entry into the US e-commerce scene will undoubtedly set it up for direct competition with e-commerce giant Amazon. Additionally, it will also face challenges from other emerging Chinese retailers such as Temu and Wish. The fast fashion company Shein, recently embroiled in forced labor allegations, is also a formidable contender in the market.
TikTok’s foray into ecommerce is a significant step for the platform, seeking to capitalize on its vast user base and drive further engagement. As it steps into this new territory, The company aims to carve out its space in the US market, vying for the attention and loyalty of American shoppers in the increasingly competitive online retail landscape.