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TikTok aims to expand US e-commerce business tenfold to USD 17.5 Billion
The move not only pits TikTok against Amazon but also places direct competition with fellow Chinese-owned brands like Temu and Shein.
According to a recent Bloomberg report, TikTok has set the goal of expanding its US e-commerce business to potentially reach USD 17.5 billion in 2024, marking a tenfold increase.
Internal meetings in recent weeks have involved discussions about the 2024 merchandise volume target for the US iteration of TikTok Shop. The platform, which combines online entertainment with impulse buying, may see adjustments based on business performance, according to anonymous sources familiar with the matter.
The company's ambitious objective not only positions it in direct competition with Amazon but also pits it against other Chinese-owned brands like Temu and Shein, both of which have gained significant traction among younger American shoppers. Unlike its two discounting rivals, TikTok relies on its extensive social media reach and the allure of viral videos to engage and attract buyers.
The report also mentioned that in 2023, TikTok was projected to achieve approximately USD 20 billion in global gross merchandise value with the majority of sales coming from Southeast Asia through its platform.
As of now, the company is aiming to boost sales in the United States and Latin America, with plans to initiate the e-commerce operation in the coming months, as disclosed by two individuals familiar with the matter.
TikTok Shop enables users to make purchases while browsing a continuous stream of short videos and live streams within its primary social media app, envisioning it as a potential alternative to Amazon for consumers.
ByteDance, the parent company of TikTok, is determined to globalise its e-commerce model. In the United States, TikTok is providing free shipping and subsidies to influencers who promote various products such as gadgets, clothing, and makeup through videos and live streams.
In November 2023, TikTok reported that over five million new customers in the US made purchases on the platform driven by Black Friday and Cyber Monday promotions.