According to sources familiar with the matter, TikTok plans to more than quadruple its global e-commerce business this year, with product sales reaching $20 billion, Bloomberg reported. It is reported that the total value of goods last year was only $4.4 billion, which refers to the total value of goods sold through TikTok Shop. Currently, TikTok’s main market is in Southeast Asia, but some say the platform is also striving to expand sales in the United States and Europe, although the European and American markets only account for a small portion of its $20 billion target.
ByteDance brought its business model to 150 million consumers in the US market, and solved the national security problems questioned by the US government through investment in information data protection. However, Montana has banned TikTok downloads since 2024, and legislators have also proposed a similar nationwide ban bill.
TikTok Shop aims to become a substitute for Amazon or Shopee by allowing consumers to purchase products while watching short videos and live broadcasts. In 2021, TikTok began launching similar services in markets such as Indonesia, Vietnam, and the United Kingdom. Although it has withdrawn from its UK business, the Southeast Asian market is still thriving, with Alibaba’s Lazada, Shopee, and Indonesian startup Tokopedia all strong competitors.
Simon Torin, co founder of Cube Asia, an e-commerce research company, said that the rapid growth of TikTok Shop poses a direct threat to existing e-commerce platforms in Southeast Asia. However, currently, TikTok has not shown significant growth momentum beyond beauty and fashion categories, and most of the growth is achieved by TikTok providing coupons and significant marketing expenses.
TikTok Shop is only a small part of the $80 billion revenue of ByteDance at present. In contrast, Sea, the largest internet company in Southeast Asia, saw an 18% increase in its e-commerce GMV last year, reaching $73.5 billion. According to Cube Asia, the GMV of TikTok Shop in Indonesia alone exceeded $2.5 billion last year and exceeded $1 billion in the first three months of 2023.
Post time: Jun-09-2023