TikTok is preparing to launch a new e-commerce program to help Chinese merchants sell their products in the US. The social media platform is available in over 160 countries and has over a billion users. That makes it the fourth largest social media platform in the world. Facebook leads by just under 3 billion active users, followed by YouTube’s 2.2 billion and Instagram’s 1.4 billion users. According to the latest statistics from Wallaroo media, Americans have downloaded TikTok over 220 million times. Most people are under the impression TikTok captures the younger audience. It’s audience in fact ranges from ages between 13 and 60.
How will the TikTok online shop work?
Although there is no official confirmation from TikTok itself, it’s been widely reported that the video platform will store and ship a variety of products. The products will strictly be from Chinese merchants, which will include clothes, kitchen appliances and electronics.
Semafor is reporting that TikTok will be launching a dedicated e-commerce tab within the app, that will become a central place for customers. Users will view goods on sale both from the new store and TikTok Shop.
The plan is not to limit the e-commerce shop to Chinese merchants, but to make it accessible to other entrepreneurs too.
Chinese retailers respond to TikTok’s plans
Last month Mexico surpassed China as the US top trading partner. China had always been in the top spot. Some are saying this milestone reflects a real shift in the dynamics of the global economy. It’s no longer prioritizing low prices and greater efficiency.
TikTok’s new initiative was born out of frustration raised by Chinese manufacturers. They battled with substandard customer service to Western consumers on TikTok Shop. Semafor is also reporting that long shipping times from China to the US and UK contributed to the frustration.
In May, Montana Governor Greg Gianforte signed a bill banning TikTok, prohibiting it from operating in the state from next year. It’s the first ban of its kind in the US.
This has frightened Chinese retailers, who are now concerned about the future of the app in the US.
TikTok responded with a statement reassuring users that it will not go down without a fight. “We want to reassure Montanans that they can continue using TikTok to express themselves, earn a living, and find community as we continue working to defend the rights of our users inside and outside of Mantana.”
American lawmakers respond to TikTok’s plans
US lawmakers have expressed their concern over what they call “flooding the US market” with TikTok’s new e-commerce business. TikTok Shop alone brings in $4.4 billion, according to Bloomberg.
There are concerns that instead of partnering with US merchants, TikTok will use the digital marketplace to get goods to the American shopper. It could potentially be a huge threat for fast fashion platforms like Shein and Temu.
In 2021 US president Joe Biden signed the Uyghur Forced Labor Prevention Act into law, banning products from Xinjiang imported into America. Companies are only exempted if they can prove their suppliers “don’t use forced labour”. Using TikTok’s new e-commerce platform will exclude import duties, resulting in offering goods at an even lower price.
Lawmakers are now fearing that retailers might take advantage of this loophole and buy in bulk. This could force local businesses to close shop.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand. Do you have a story you would like her to expose, report on, or consider? Please send your request to Newsdesk@locate2u.com.
