TikTok Store launches in the US as the company pivots to e-commerce

NEW YORK (AP) – After months of testing, TikTok is launching its e-commerce product in the U.S., seeking to translate the app’s cultural relevance into sales among young consumers.

The company said Tuesday that its shopping division, called TikTok Shop, will include several features such as the “Shop Tab” – a marketplace it has been testing on the app since August; Affiliate videos on your feed, which allow creators to earn commissions on their products; and a logistics division called Fulfilled by TikTok, which stores and ships products for sellers.

Currently, TikTok spokeswoman Laura Perez said more than 200,000 sellers have signed up for TikTok Shop. Meanwhile, more than 100,000 content creators participate in the affiliate program, which allows users with 5,000 followers to create videos that go directly to TikTok’s algorithmically designed “For You” feed.

The Shop tab, which contains products from the TikTok marketplace, is now available to 40% of users on the app’s home screen. The feature will be rolled out gradually until it is available to the app’s 150 million U.S. users in early October, Perez said.

The social shopping market, known as social commerce, is estimated at $69 billion in the U.S., led by Meta, the owner of Facebook and Instagram, according to Insider Intelligence. ByteDance, the Beijing-based company that owns TikTok, already operates a thriving social media marketplace on Douyin, its sister video app aimed at the Chinese market. Insider Intelligence estimates that 33 million U.S. consumers will make purchases on TikTok this year, which allows product discovery using popular hashtags such as #TikTokMadeMeBuyIt.

TikTok said it will continue to offer live shopping, a big earner in Asia that hasn’t gained popularity among U.S. customers as the company had hoped. Earlier this year, Meta-owned Instagram removed its live shopping feature from its app. It also removed the store tab from the app’s navigation bar, significantly reducing its e-commerce ambitions.

“No social media app has really been able to take hold of e-commerce in the U.S.,” said Jasmine Enberg, a social media analyst at Insider Intelligence. “TikTok undoubtedly has really ambitious goals, a roadmap in China, and can afford to take some losses along the way. However, TikTok Shop is still an unconfirmed investment, which will make sales difficult for particularly established brands in the US.”

TikTok has several advantages, namely that it caters to a base of young consumers whose shopping habits are still forming. It also has an army of creators who create an endless amount of content algorithmically tailored to users every day, Enberg said.

Enberg noted, however, that the company can’t rely solely on its technology to change U.S. consumer behavior, which, aside from an apathetic response to live shopping, doesn’t really extend to in-app purchases on social media.

Already, TikTok’s foray into e-commerce has faced criticism amid media reports that users are encountering questionable products and brands that have been banned from Amazon for fake customer reviews. A quick look at the market on Tuesday showed a range of products, from cheap electric egg beaters to edibles offered by small businesses, as well as vendors offering Chips Ahoy! Cookies for $8.99. Some verified brands, such as phone case designer OtterBox and makeup company Benefit Cosmetics, have also listed their products.

The e-commerce platform launches as TikTok continues negotiations with the US government over its future in the country. Critics charge that the social media giant could be a tool for the Chinese government to surveil Americans. The company said the TikTok store will offer a secure checkout process and all U.S. user data is stored and managed by servers operated by software giant Oracle.