TikTok Store suspends European plans, focuses on the USA

TikTok has reportedly decided to suspend its plans to expand its e-commerce business in major European markets.

Instead, the ByteDance-owned social media platform will focus on expanding its presence in the United States, its most lucrative market, where it faces potential divestiture or ban, Bloomberg reported on Friday (May 31).

The report shows that TikTok’s e-commerce division, known as TikTok Shop, has seen rapid growth and has become one of the app’s most popular features. By combining video content with impulse purchases in a visually appealing way, TikTok Shop stands out from the competition. The success of TikTok Shop is based on ByteDance’s Douyin, which is one of the largest eCommerce platforms in China.

TikTok planned to launch its shopping platform in Spain, Germany, Italy, France and Ireland in July. However, the report states that the company has decided to put its expansion plans on hold along with its intention to bring the Store feature to Mexico and Brazil.

According to the report, the decision reflects ByteDance’s strategy to focus on the US market to avoid a possible ban.

The report shows that ByteDance management realizes the importance of focusing on the US market, which boasts 170 million monthly users. By demonstrating its value to domestic sellers and consumers, TikTok aims to alleviate concerns that have discouraged some sellers from signing up to the platform. The company has set a goal of increasing U.S. merchandise sales volume to $17.5 billion this year.

The report said one of the reasons for TikTok’s decision to put its European expansion plans on hold is the potential regulatory scrutiny it could face, similar to what it faces in the US. The company understands that full-scale European expansion may involve regulatory challenges and wants to avoid such complications. TikTok is currently under investigation by the European Union (EU) over a lighter version of the app in France and Spain, which is being analyzed for potential addiction risks.

A TikTok spokesperson told Bloomberg that the company is “demand-driven.”

“We have seen the positive impact of TikTok Shop and are excited to continue experimenting with these new commerce opportunities,” a spokesperson said in the report.