ByteDance doubles down on TikTok Shop, despite threat of a US ban


TikTok Shop has gained even more traction since the president signed a law that may ban TikTok early next year. But if it goes away, Chinese e-commerce giants Temu and Shein could be the biggest winners.

TikTok might be fighting for its life to continue operating in the United States, but that hasn’t stopped its China-based parent company ByteDance from betting on its newest growth machine: TikTok Shop.

Since President Joe Biden signed the law that threatens to ban TikTok nationwide, TikTok Shop has grown rapidly. Data from Route, an app that millions of online shoppers use to track all their e-commerce purchases in one place, shows a 13 percent jump in orders from TikTok Shop from April to May—almost double the average monthly increase (7 percent) since the beginning of this year. And that’s after TikTok Shop’s first quarter of 2024 for Route customers beat out its last quarter of 2023, when holiday shopping almost always yields the strongest sales on the calendar.

When TikTok Shop was introduced in the U.S. last September, it quickly became the internet’s new favorite dollar store—setting itself apart from American e-commerce rivals like Amazon by focusing less on common staples and more on cheap, often heavily discounted novelty items and funky special purpose products reflective of the internet trend du jour. (“No one moves into a new apartment and says, ‘Oh, I have to do a TikTok Shop run!’” said Route CEO Michael Yamartino.) TikTok says it had more than half a million Shop sellers in the U.S. at the end of 2023.

By the beginning of 2024, it was gunning to grow Shop tenfold in the U.S. to some $17.5 billion in sales, per Bloomberg, making it a core part of TikTok’s overall business that some estimate to be worth more than $100 billion.

Creator agency founder Eric Dahan, whose LA-based Mighty Joy helps brands grow through influencer marketing on TikTok Shop, told Forbes that “from a creator and brand standpoint, it’s all been going up and to the right.” One positive indicator of Shop’s success, he noted, was that after TikTok initially covered the costs of steep discounts on many Shop products—a strategy that incentivized customers to buy, and brands to join the platform in the first place—TikTok eased off those subsidies and started taking a bigger cut of merchants’ sales in April. ​​”That was a really big signal that they’re [so] confident in the adoption by brands that they can start charging,” he said.

Even after the divest-or-ban law passed in late April, ByteDance didn’t slow down. Instead, it reportedly halted expansion of TikTok Shop in Europe in May to pour resources into tightening its grip on the American market. TikTok now appears to be hiring hundreds of employees in the U.S. to support those efforts, according to job listings for TikTok Shop posted on the company’s career page and LinkedIn. They include TikTok Shop product managers, creator specialists, intellectual property experts, moderation or recommendation staffers, and even personnel “responsible for establishing and maintaining effective relationships with key regulators in the United States” and “shaping TikTok Shop’s approach to regulator engagement.” (Meanwhile, the company announced layoffs across other departments.)

“The commerce industry has seen tremendous growth in recent years and has become a hotly contested space amongst leading Internet companies,” many of the open TikTok Shop job postings say. “Its future growth can not be underestimated.” TikTok declined to respond to questions from Forbes about its strategy, growth and hiring for TikTok Shop’s U.S. business. ByteDance did not respond to a request for comment.

Creators and others in the industry also began sensing that TikTok’s algorithm was boosting posts that promoted TikTok Shop and throttling posts that did not, “suspecting that TikTok is artificially only rewarding Shop content to encourage more people to post it,” Dahan said. “So it seems like it’s a really concerted effort across TikTok to push Shop aggressively.” And “coupling that with… people saying that they’re seeing a lot more products in their feed than before, I think it’s clear that they’re very heavily invested in this.”

Its efforts appear to have paid off so far. The fact that TikTok Shop has largely gained momentum since President Biden signed the divest-or-ban bill shows just how little regulatory scrutiny has deterred the platform’s popularity in the U.S. A ban isn’t a foregone conclusion; TikTok could still be sold (though it’s unlikely), or the company could successfully fight off the ban in court (a D.C. appeals court will hear arguments challenging the potential TikTok ban on September 16).

To be sure, that uncertainty is affecting some merchants on the platform. Small business owner Puneet Nanda, who found overnight success on the app and for a time was the top seller on TikTok Shop, told Forbes in April that his sales had tumbled because customers don’t understand that there’s a long legal battle ahead and they worry that if they buy on TikTok Shop, it’ll go under before their orders can be fulfilled. “Our sales are dropping every single day,” Nanda told Forbes the day after Biden signed the new law. “Our sales have literally seen a 30-plus percent drop in the last three weeks alone.”

But despite the regulatory turbulence, TikTok Shop is already starting to eat into Amazon’s business, according to Route data.

While TikTok Shop isn’t big enough and hasn’t been around long enough to have outpaced Amazon, the firm’s data shows TikTok Shop taking a bite of its biggest American competitor. From the last quarter of 2023 to the first of 2024, “if you combine the orders from Amazon and the orders from TikTok, the ratio did shift in favor of TikTok,” Yamartino, the Route CEO, told Forbes. About two thirds of those, or 65 percent, were from Amazon late last year; early this year, that went down to 61 percent. And while the share of TikTok Shop orders on Route has increased, on average, 7 percent month-over-month this year, Amazon’s has stayed mostly flat, growing at just 1 percent.

TikTok Shop is clawing from Amazon in more subtle ways, too: Dozens of current TikTok Shop employees are recent or longtime Amazon veterans, LinkedIn shows. In the U.S., they include TikTok Shop’s head of marketing, head of intellectual property rights protection and head of fraud and loss.

Unlike for Amazon, TikTok Shop’s growth—and potential downfall—may prove to be a boon for China-based rivals Temu and Shein, both of which are growing rapidly in the U.S. Temu was the single most-downloaded app (excluding games) here last year, according to app analytics firm, while Shein ranked sixth. (Those, TikTok and its sister app CapCut were downloaded more than Meta’s WhatsApp, Instagram and Facebook in 2023, per The Chinese e-commerce sites are becoming so popular with American shoppers that the order volume is wreaking havoc on global trade routes and causing a surge in air shipping prices.

“There’s a specific itch that TikTok Shop scratches right now, which is: we want really good deals on stuff that’s compelling and cool; it isn’t everyday old prices, it isn’t everything that you could want in the world delivered the next day,” said Route’s Yamartino. “Shein and Temu are definitely in that same vein.”

If the app does get banned in the U.S., the people spending millions on TikTok Shop would likely turn to the Chinese e-commerce companies rather than Walmart or Amazon, Yamartino added. He compared TikTok Shop to today’s version of Alibaba’s Tmall or Wish, the ultra-bargain e-commerce site known for its fun-but-junky, low-priced China-made items that was the most downloaded shopping app in the world in 2018. “But I wouldn’t expect Walmart or even Amazon, really, to win directly that much day one.”

This story was originally published on and all figures are in USD.

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