Shopping On US TikTok Shops Increases Amid Threats Of Prohibition

JAKARTA TikTok users in the United States are increasingly spending a lot of money on buying goods from various sellers on the TikTok Shop e-commerce platform during this year's holiday shopping season. This was revealed from data analyzed by Reuters based on TikTok estimates and expenditure patterns measured by Facteus.

TikTok Shop, which was launched in the US in September 2023, seems to have won an e-commerce market share at a very crucial moment. This platform is an e-commerce channel for big brands such as e.l.f. Cosmetics and Ninja Kitchen.

In a press release at the end of November, TikTok Shop claims that its sales hit $100 million on Black Friday, day after Thanksgiving, when US consumers were hunting for massive discounts online. Previously, TikTok called the number of monthly buyers on TikTok Shop almost three times.

On Friday 6 December, a US federal appeals court supported a law requiring ByteDance, owner of China-based TikTok, to release TikTok's US holdings early next year or face bans. If the ban is imposed, TikTok Shop could also be affected.

"TikTok Shop is a new distribution channel, and brands are getting very good results through this platform," said Erik Huberman, CEO of marketing agency Hawke Media, who has clients selling products via TikTok Shop. "To be honest, there is no other alternative. This will be a lost source of income if the ban is implemented."

Like its competitors, Shein and Temu, TikTok Shop offers merchandise from third-party vendors, some of which send goods from China. These platforms compete tightly in terms of prices and attract more US sellers at lower costs to speed up shipments.

Using the popularity of the TikTok social media app, TikTok Shop traders usually take advantage of sponsored ads and "influencers" to market their products to 170 million TikTok users in the US. Customer orders are met directly by traders, sometimes using third parties or TikTok e-commerce fulfillment services.

For customers like Jasmine Whaley (31 years) from York, Pennsylvania, TikTok Shop is a new place to find clothes, skin care products, and Crocs. This year, Whaley has spent nearly $700 on the platform after seeing videos from influencers and advertisements about products of interest.

TikTok, according to Whaley, has "broken the code" in curating content and products that suit its preferences. He also said that TikTok Shop orders often arrive faster than orders he made on Amazon.

TikTok Shop also offers a feature called "LIVE," which is a live video broadcast where shoppers can buy goods directly. Nico Le Bourgeois, Head of US TikTok Shop Operations, said in a statement to Reuters that the number of monthly LIVE sessions in the US has almost tripled in the past year.

According to third-party data firm Facteus, US consumer spending on TikTok Shop surpassed spending on Shein and Temu for seven days ahead of Cyber Monday, December 2, 2024, which is one of the biggest online shopping days. Facteus data is taken from 140 million debit cards and consumer credits, representing about 7% to 10% of total US spending.

TikTok Shop is now one of the big players in e-commerce, although the threat of a ban in the US is still looming.