TikTok pauses expansion in Europe and focuses on e-commerce in the US – Alibaba Gr Hldgs (NYSE:BABA), Amazon.com (NASDAQ:AMZN)

ByteDance-property ICT Tok has put on hold plans to expand its e-commerce platform in major European markets, focusing on growth in the U.S. amid regulatory challenges.

According to a Bloomberg report, this decision affects planned rollouts in Spain, Germany, Italy, France and Ireland, originally scheduled for July, as well as in Mexico and Brazil.

The move is aimed at strengthening ByteDance’s position in the US, which boasts 170 million monthly users, to counter a potential ban in the region.

Concerns about U.S. divestment or prohibition laws have discouraged some sellers from joining the platform.

TikTok aims to grow its U.S. merchandise volume tenfold this year to $17.5 billion. However, widespread European expansion could trigger regulatory scrutiny similar to that faced in the U.S.

The TikTok Shop feature, which combines engaging video content with impulse purchases, has become the fastest-growing segment of the app.

The launch of the TikTok store in the UK in 2021 faced challenges as Chinese exporters flooded the market with cheap products, prompting mixed reviews.

Read also: TikTok denies reports of code-splitting to create US-only algorithm: ‘qualified divestment’ needed to continue operations in the country not possible

TikTok then prioritized local A-list brands for newer market entries to improve user experience and market reception.

In the US, TikTok faces significant risks from regulatory action. In May, ByteDance legally challenged a mandate signed by President Joe Biden that requires it divest TikTok by Jan. 19 or face a ban on national security grounds.

ByteDance says a divestment is not commercially, technologically or legally feasible.

TikTok has strengthened incentives to grow its e-commerce presence in the U.S., lowering the entry threshold for its affiliate program from 5,000 followers to 1,000.

Affiliates can promote products on the TikTok store and earn commissions on sales. Meanwhile, the European Union is investigating whether TikTok Lite, a simplified version of the app available in France and Spain, may be contributing to user addiction by offering cash rewards for continued use.

Reservation: : This content was created in part using AI tools and reviewed and published by Benzinga editors.

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