ByteDance is suspending plans to launch TikTok Shop in Europe to focus on the US

TikTok has put on hold plans to expand its e-commerce business in several markets in Europe and will instead focus on growth in the US, where it is in a legal dispute with the US government, Bloomberg News reports.

TikTok, property Chinese company ByteDance (BDNCE), has suspended the launch of its TikTok Shop shopping platform in Spain, Germany, Italy, France and Ireland, which was supposed to take place in July. The company also plans to make the Shop feature available in Mexico and Brazil report he added, citing people with knowledge on this matter.

It is unclear if or when ByteDance intends to resume the plan.

The move, which may surprise many sellers in the region, reflects ByteDance’s goal to focus on the U.S. market and demonstrate its value to domestic merchants and consumers. The report noted that the company aims to increase its U.S. merchandise volume tenfold this year, to about $17.5 billion.

In April, U.S. President Joe Biden signed a bill that would force the U.S. to ban the video-focused social network TikTok unless its Chinese parent company, ByteDance, divests itself of the app within about a year. In response, TikTok and its Chinese parent company ByteDance sued the US government.

The report says fear of a potential ban has discouraged some sellers from signing up to the new platform.

The company’s management also believes that full European expansion could prompt regulatory scrutiny in the EU, similar to the US, the report noted.

TikTok Shop’s features of interesting videos, popular influencers and full-scale commerce help it differentiate itself from competitors such as Meta Platforms (META), Instagram and Alphabet’s (GOOG) (GOOGL), YouTube and opens the door to Amazon.com (AMZN ).

TikTok’s efforts are similar to ByteDance’s Douyin, the Chinese version of TikTok, which is one of China’s largest e-commerce platforms today. Using this model, the report found that TikTok Shop found success in Southeast Asia before launching in the U.S. during the holiday season last year.

It was reported this morning that TikTok is working on a clone of its recommendation algorithm for US users, which could result in a version that works independently of its Chinese parent. However, TikTok denied these reports.