US spending on TikTok Shop gains as TikTok faces threat of ban
TikTok Shop, the e-commerce platform launched in the U.S. in September 2023, has seen significant growth this holiday shopping season. According to TikTok’s estimates and data from Facteus, U.S. consumers have spent heavily on the platform, likely gaining market share in e-commerce at a critical time.
In late November, TikTok Shop reported reaching $100 million in sales on Black Friday, a key shopping day in the U.S. This success is attributed to the platform’s ability to attract major brands like e.l.f. Cosmetics and Ninja Kitchen, along with third-party vendors selling a wide range of products. TikTok Shop also reported that the number of people buying products each month has nearly tripled, although Reuters could not independently verify these claims.
Despite this success, TikTok Shop faces potential challenges due to ongoing legal pressures. A U.S. federal appeals court recently upheld a law that could force ByteDance, the Chinese parent company of TikTok, to divest TikTok in the U.S. by early next year. If enforced, this could extend to TikTok Shop, affecting the platform’s growth.
TikTok Shop competes with other e-commerce platforms like Shein and Temu, which also offer products from third-party vendors, many of which are shipped from China. These platforms compete aggressively on price, and like TikTok Shop, they lure U.S. sellers with lower fees and faster shipping options. TikTok Shop merchants, often leveraging influencers and ads, benefit from the app’s massive audience of 170 million U.S. users.
One of the key features of TikTok Shop is its use of LIVE sessions, where merchants host live-streaming events to promote products directly to consumers. According to Nico Le Bourgeois, Head of U.S. Operations for TikTok Shop, the number of these Live sessions has nearly tripled over the past year.
Consumer spending data from Facteus reveals that, in the week leading up to Cyber Monday (Dec. 2), U.S. spending on TikTok Shop surpassed spending on Shein and Temu. Facteus’ data is based on a sample of 140 million debit and credit cards, representing about 7-10% of all U.S. consumer spending. For shoppers like Jasmine Whaley, TikTok Shop offers a new way to discover and purchase products, with her spending reaching nearly $700 on the platform this year. Whaley, who frequently buys clothes, skincare, and Crocs from TikTok Shop, has found that deliveries often arrive faster than those from Amazon.
With its blend of social media engagement and e-commerce, TikTok Shop has made a significant mark in the U.S. market, but its future could be influenced by regulatory and legal hurdles.
