TikTok Shop is Coming For Amazon and the Rest of the US E-Commerce Market – The Average Joe

    TikTok Shop is Coming For Amazon and the Rest of the US E-Commerce Market

    Victor Lei — Head of Research

    September 18, 2023

    September 18, 2023

    One, two, TikTok’s coming for you. Three, four, better lock your stores. In August, TikTok began rolling out its TikTok Shop feature to 150M monthly active users in the US — and now they can find a feed of “recommended” products beside their “For You” tab.

    TikTok is going after the dominant US e-commerce giant Amazon and other Chinese e-commerce companies like Shein and Temu (NASDAQ:PDD) — which have flooded the US market with cheap goods. And the fight is intensifying right before one of the most important shopping periods of the year:

    • Between Oct. 27 and Nov. 30, TikTok is subsidizing up to 50% of discounts.
    • TikTok is targeting $20B in merchandise sales this year — 4x that of last year.

    But shopping inside social media apps has failed to take off in the US. Just ask Meta (NASDAQ:META), which killed its live shopping feature this year. And even if TikTok can make it work, it still faces a range of issues ahead.

    Dupes: “TikTok made me buy it”

    Inside the shopping feed, products from brands like Revolve and Nike are blended with highly discounted China-manufactured goods or products with misspelled names — drawing criticism over copyright issues, counterfeits and potentially dangerous beauty products.

    Even before Shop’s launch, videos highlighting cheaper knock-off products had become increasingly popular — with the hashtag #dupe breaking 5.5B+ views on the platform.

    • TikTok said, “There are over 200K verified US merchants on TikTok Shop selling legitimate products” (BBG).
    • Bloomberg found several Chinese brands on TikTok that Amazon had already banned for fake reviews.

    Forward-looking: Last year, 5% of Indonesia’s e-commerce transactions happened on TikTok — which has become such a threat to offline sellers that Indonesia is planning to ban transactions on social media. In recent years, US lawmakers have already threatened to ban TikTok over security concerns — and these issues, alongside worries over collecting user payment data, could lead to renewed efforts to rein in the app.

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