TikTok is hoping to take on Amazon’s dominance over online shopping by growing its TikTok Shop commerce platform this year—to the tune of $17.5 billion or more.
A recent Bloomberg report indicated the TikTok Shop metric as a merchandise volume goal that was discussed internally within the company. TikTok aims to elbow room for itself at the table of e-commerce alongside giants like Amazon, Temu, and Shein. With the assistance of its short-form video platform and millions of users to make products go viral—that goal might not be too far-fetched.
TikTok Shop’s success in Asia has the company turning its sights to the United States to begin market domination here. Bloomberg reports TikTok amassed around $20 billion in global gross merchandise, though the bulk of sales were from Southeast Asia. As TikTok turns its sights to the Americas, it plans to launch TikTok Shop in Latin America in 2024.
Black Friday 2023 was a great introduction to the platform for many Americans, as Bloomberg reports more than five million new U.S. customers bought at least one item via TikTok Shop. The TikTok social media platform currently has around 150 million users in the United States, so there is plenty of room for the platform to grow.
TikTok Shop launched in the United States in September 2023, allowing creators to tag products from in-feed videos. It also has a dedicated tab to allow users to search for items and discover products through recommendations. During its introductory period, TikTok only charged 2% commission on these recommendations.
A new report suggests that rate may go up to 8% in the near future as it reduces subsidies it pays to merchants. Amazon seller fees are currently 15%—making TikTok Shop more lucrative for those looking to sell. Undercutting Amazon’s seller fees is a great way to attract additional attention to the platform from those looking to reach a broad audience.