TikTok wants to tenfold the size of its US TikTok Shop business to $17.5 billion this year, according to a new report from Bloomberg. The report says the 2024 freight volume target was recently discussed internally at the company and could be tweaked as the year progresses.
With this goal, TikTok would not only like to take on Amazon, but also the other Chinese companies Temu and Shein, both of which have become popular in the US, but TikTok has something that the other two companies do not have, which is extremely popular social media network that could leverage viral videos to reach buyers.
As previously Bloomberg mentionted, TikTok was on track to amass around $20 billion in global gross merchandise value last year. The majority of sales were seen in Southeast Asia. TikTok is now interested in bringing this success to the U.S. Additionally, the report states that the company plans to launch the TikTok Shop in Latin America in the coming months.
“The purported US merchandise sales figures represented by Bloomberg are inaccurate,” TikTok said in a statement.
The report shows that during the Black Friday and Cyber Monday season in November, more than 5 million new customers in the US bought something through the TikTok Shop. For context, the social media app currently has around 150 million users in the US
The news comes a day later The information reported that TikTok will begin increasing the commission it charges for most items from 2% to 8% per transaction. TikTok Shop has also started reducing some subsidies for merchants. It’s worth noting that these commissions are still significantly lower than Amazon’s seller fees, which are around 15% for most product categories.
TikTok Shop, which officially launched in the US in September 2023, allows creators to tag products to allow users to purchase products from in-feed videos and live videos. Brands can create their own product portfolios, which you can access from their profile pages. TikTok Shop also has a dedicated tab that allows users to search for different items, discover products through recommendations, browse items in different categories and manage their orders.
