TikTok aims to catapult TikTok Shop U.S. business to $17.5B in 2024

TikTok is setting its sights on growing the TikTok Shop U.S. business tenfold, targeting a staggering $17.5 billion in merchandise volume this year. According to a recent report from Bloomberg, this ambitious goal was internally discussed within the company and may see adjustments throughout the year.

Launched officially in the U.S. in September 2023, TikTok Shop allows creators to tag products in in-feed and live videos, enabling users to seamlessly purchase items. Brands can curate their product portfolios accessible from their profile pages, while a dedicated tab facilitates user-friendly navigation, allowing customers to discover, browse, and manage orders efficiently.

The social media giant’s aspirations extend beyond rivalling e-commerce behemoth Amazon; it also seeks to challenge other Chinese-owned contenders such as Temu and Shein, both of which have gained significant popularity in the U.S. market. What sets TikTok apart, however, is its unparalleled influence as a viral video-driven social media platform, providing a unique avenue to connect with potential buyers.

Bloomberg previously reported TikTok’s momentum, with projections indicating a global gross merchandise value of around $20 billion in the previous year, primarily fueled by sales in Southeast Asia. Now, the focus shifts to replicating this success in the lucrative U.S. market, with plans to introduce TikTok Shop in Latin America in the coming months, as outlined in the report.

During the recent Black Friday and Cyber Monday shopping frenzy in November, TikTok Shop witnessed a surge, with over 5 million new U.S. customers making purchases. To put this into context, TikTok boasts approximately 150 million users in the U.S., showcasing the potential for further growth.

Coincidentally, The Information reported a day earlier that TikTok is set to increase the commission it charges on most items, raising it from 2% to 8% per transaction. Simultaneously, TikTok Shop has begun scaling back subsidies for merchants. Notably, even with these adjustments, TikTok’s commission rates remain significantly lower than Amazon’s seller fees, which hover around 15% for most product categories.

As TikTok embarks on this ambitious journey to reshape the e-commerce landscape, the coming months will undoubtedly witness the evolution of TikTok Shop and its bid to reshape the way users engage in online shopping through the power of viral videos.

Written by Maya Robertson


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