TikTok has put on hold plans to launch its fast-growing e-commerce business across major European markets, focusing instead on growth in the US where it’s fighting a divest-or-ban law.
ByteDance Ltd.’s social media startup has put on hold a rollout of its shopping platform across Spain, Germany, Italy, France and Ireland that was to have taken place as soon as July, according to people familiar with the matter. It also iced plans to bring the Shop feature to Mexico and Brazil, one of the people said. It’s unclear if or when ByteDance may choose to resume the process, the people added, asking they not be identified discussing private information.
The move, which may catch many merchants in the region by surprise, reflects ByteDance’s objective of entrenching itself in the US as a way to prove its value to domestic merchants and consumers. ByteDance’s leadership wants to concentrate on its most lucrative market — with 170 million monthly users — to thwart a potential US ban that’s discouraged some merchants from signing up for the new platform, the people said.
A TikTok spokesperson declined to comment on the paused rollout plans and said the company is “guided by demand.” “We’ve seen the positive impact of TikTok Shop, and we’re excited to continue experimenting with this new commerce opportunity,” the spokesperson said.
It’s set a goal to grow US merchandise volume tenfold to as much as $17.5 billion this year. Importantly, management also recognises that a full-on European expansion could invite regulatory scrutiny similar to the US, the people said.
TikTok Shop — which combines addictive video content with impulse-buying in visual fashion — is the app’s fastest-growing feature. The combination of eye-catching videos, popular influencers and full-scale commerce helps set it apart from rivals like Instagram and YouTube, and opens a path to take on Amazon. TikTok’s template is ByteDance’s own Douyin, today one of the largest Chinese e-commerce platforms. Using that model, TikTok Shop found success in Southeast Asia before debuting in the US in time for last year’s holiday season.
It hasn’t always been smooth-sailing. TikTok Shop’s UK launch as early as 2021 has generated mixed reviews, after Chinese exporters flooded the market with cheap wares. TikTok has since relied more on local A-list brands for later market entries.
In the US, the bigger immediate threat is Washington.
ByteDance filed a legal challenge in May to a measure signed by President Joe Biden that will ban TikTok if its Chinese owner hasn’t divested the app by Jan. 19 — an ultimatum meant to address perceived national security concerns. ByteDance has argued a divestiture is “not commercially, technologically, or legally feasible.”
TikTok has stepped up subsidies and other incentives to super-charge its US e-commerce business in recent weeks. It dropped the threshold for creators looking to join its affiliate program to 1,000 followers from 5,000. Affiliates can post videos touting products sold in TikTok Shop and collect commissions on the sales they generate.
TikTok, in the meantime, is under an European Union probe into whether a lighter version of its app in France and Spain risks fomenting addiction. TikTok Lite promises to pay users cash through a points system as long as they keep scrolling for content, a common marketing tactic in China.
By Zheping Huang
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