The data suggests that TikTok Shop, which debuted in the U.S. in September 2023, has likely captured a larger share of the e-commerce market at a pivotal time. The platform acts as an e-commerce avenue for prominent brands, including e.l.f. Cosmetics and Ninja Kitchen, among others.
In a press release issued in late November, TikTok Shop announced that its sales reached $100 million on Black Friday, a day known for heavy online spending by American consumers. The platform also reported that the number of monthly purchasers on TikTok Shop had nearly tripled. However, Reuters was unable to independently verify these assertions.
On Friday, a U.S. federal appeals court upheld a law mandating that ByteDance, the Chinese parent company of TikTok, divest its U.S. operations by early next year or face a potential ban. Should such a ban occur, it could also impact TikTok Shop.
"TikTok Shop represents a new distribution channel, and brands are thriving on it," stated Erik Huberman, CEO of marketing agency Hawke Media, which has clients utilizing this feature. "There really isn't an alternative. Losing it would mean a significant loss of revenue."
Similar to competitors like Shein and Temu, TikTok Shop features products from third-party vendors, some of which ship from China, creating intense price competition. Each platform has been working to attract more U.S. sellers by offering lower fees to enhance shipping efficiency.
Leveraging the popularity of the TikTok social media platform, merchants on TikTok Shop typically employ advertisements and sponsored influencers to promote their products to TikTok's 170 million users in the U.S.
Merchants utilizing TikTok Shop handle customer orders directly, occasionally partnering with third-party services or leveraging TikTok's own e-commerce fulfillment options.
For consumers like Jasmine Whaley, 31, from York, Pennsylvania, TikTok Shop has emerged as a fresh avenue for discovering clothing, skincare items, and Crocs. This year, she has invested nearly $700 on the platform after being influenced by videos from content creators and advertisements showcasing various products.
Whaley noted that TikTok has effectively tailored content and products to her preferences. She has experienced faster delivery times for her TikTok Shop orders compared to those made on Amazon.
For both merchants and influencers, TikTok Shop features a service called "LIVE," which allows for live video streams where shoppers can buy products in real-time.
Nico Le Bourgeois, the head of U.S. Operations for TikTok Shop, stated to Reuters that the frequency of Live sessions conducted each month has nearly tripled in the past year across the United States.
Data from the third-party analytics firm Facteus indicates that U.S. consumer spending on TikTok Shop surpassed that of Shein and Temu in the week leading up to Cyber Monday, December 2, a significant online shopping event. Facteus reports that its findings are based on data from 140 million consumer debit and credit cards, accounting for 7% to 10% of total U.S. spending.