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TikTok targets $17.5 billion with expansion in 2024

TikTok targets $17.5 billion with expansion in 2024
TikTok targets $17.5 billion with expansion in 2024

TikTok is preparing for a bold move in the e-commerce domain this year: to expand its Shop venture to an astounding $17.5 billion. This leap will position the social media giant to challenge dominant online retailers like Amazon, JD.com, AliExpress, and others. 

With a successful track record in Southeast Asia and plans for Latin America, TikTok will likely redefine the intertwining of social media engagement with online shopping experiences. 

TikTok’s expansion strategy

The platform is known for its viral videos which could be used to promote products to potential buyers. With more than 1.5 billion monthly users as of 2023 – and set to reach 2 billion by the end of 2024 – TikTok has the social footprint to give Amazon a run for its money. 

By integrating e-commerce with online shopping, it keeps users in the app for longer. This is a win for both TikTok and online shoppers: the platform’s engagement metrics get a boost and shoppers don’t have to jump around apps to complete purchases. 

It generated a staggering $9 billion revenue in 2022 – which was a 100% year-on-year increase – before crossing the $10 billion milestone in 2023. By leveraging its social media presence to drive sales, TikTok stands to reshape the dynamics of online shopping altogether.  

TikTok’s online success in 2023

The TikTok Shop was officially launched in the US in September 2023. The service allows creators to tag products for direct purchase. This leverages TikTok’s integrated logistics and payment solutions. 

During the Black Friday and Cyber Monday period last year, more than 5 million users turned to TikTok Shop for their online purchases. 

And now, the platform plans to expand into Latin America, extending its successful e-commerce model from Southeast Asia to new markets.

ALSO READ: TikTok partners with Royal Mail for ‘Click and Drop’ service

Sights set on Latin America

In 2022, TikTok partnered with Adjust, an analytics company, to better understand the measurable business impact of a customer’s shopping journey. The data showed that, at the time, Latin America had more than 500 million active smartphones in use. 

In addition, users in Brazil, Colombia and Argentina tend to spend more than five hours a day online. By 2025, 81% of the population would have access to a smartphone. Even back then, TikTok’s goal was to create an entertainment ecosystem that “stimulates action and is the ideal stage for what the industry calls shoppertainment.”

“At TikTok, we define ‘shoppertainment’ as a content-driven commerce that prioritizes entertainment and education. At the same time, the concept integrates content and community to create highly immersive shopping experiences.”

TikTok’s $10 billion milestone

Locate2u News previously reported on TikTok’s e-commerce surge when it became the first non-gaming app to reach $10 billion in consumer spending. It surpassed popular games like Candy Crush, Honor of Kings, Monster Strike, and Clash of Clans.

According to Data.Ai, TikTok started 2023 with more than $6.2 billion in consumer spending, generating an additional $3.8 billion throughout the year. Most of this influx came from Coins, TikTok’s virtual currency. 

Data.AI also predicts that TikTok will reach a $15 billion consumer-spend milestone this year – a modest figure compared to the platform’s latest expansion plans. “Cumulative spend in TikTok in 2023 grew 70% YoY — 3.7x faster than Candy Crush Saga at 19%. Candy Crush Saga was first released in 2012 and simultaneously began monetizing through the app stores. TikTok, however, really began to see a revenue ramp in 2016.“

NOW READ: Unpacking TikTok’s e-commerce guide for small businesses

About the author

Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.

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