TikTok, one of the leading social media platforms worldwide, has made a significant push into the global e-commerce sector through the launch of a social commerce feature known as TikTok Shop. While the shopping service is gaining strong momentum in some regions, including Southeast Asian countries, TikTok Shop is facing a difficult time attracting sellers on its platform in the United States.
Notably, there are a couple of factors behind the struggles faced by TikTok in the United States market. First, TikTok has forbidden foreign merchants from accessing the shopping service in the United States. It means that only local sellers and merchants are able to sell products through TikTok Shop in the North American market.
Concerns surrounding data privacy and national security have led to a two-way battle between the ByteDance-owned TikTok and the United States government. Notably, the government has accused the social platform of sharing and selling the data of Americans to the Chinese government. As a result, the government is looking at options that might potentially lead to a total ban on the social media platform or a complete stake sale by the Chinese firm in the United States.
With the lack of clarity surrounding the future of TikTok and its social commerce ambitions in the North American market, merchants in a growing number have been found to be reluctant to sell their products on the social media platform. Amid its battle with the United States government, TikTok, however, has adopted a number of strategies to attract more sellers to its platform.
While ByteDance is facing an uphill task in luring US-based merchants to its TikTok Shop service, the firm is making further waves in the United States market through its other social media platform Lemon8.
Being the second largest e-commerce market in the world, ByteDance foresees a strong growth potential in the United States. Consequently, PayNXT360 expects the firm to make another push into the social commerce market through the launch of its Lemon8 platform in 2023. However, like TikTok and the concerns surrounding data privacy and national security, the United States government is expected to have its suspicions around Lemon8 as well, as both are owned by ByteDance.
PayNXT360 expects Lemon8 to grow into widespread popularity among Americans over the next few quarters. In Q1 2023, the firm also announced that it will pay creators to post content on the social media platform. This is part of the firm’s strategy to drive its user base. ByteDance has already accumulated a strong user base for TikTok in the United States. The growing presence of Lemon8 will further enable the firm to drive its market share in the North American region. However, government regulations pose a significant growth challenge for ByteDance from the short to medium-term perspective.
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