TikTok fails to attract merchants in the United States for its shopping service

TikTok fails to attract merchants in the United States for its shopping service

TikTok fails to attract merchants in the United States for its shopping service

Print Print Email Email

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.

  • The US-only policy adopted by TikTok should appeal to more American merchants and sellers to sell on the social platform. Over the years, these merchants have been found expressing frustration with the crowded foreign merchants selling products on Amazon and Walmart.
  • Despite the US-only policy, sellers are reluctant to invest their time and resources to sell products through TikTok Shop. The major reason behind the reluctance is the growing likelihood that the social platform will either be banned or forced to sell to a third party from the short to medium-term perspective.

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.

  • From offering discounts to free shipping, TikTok is seeking to lure sellers to its TikTok Shop service. The firm is also expected to launch an affiliate program to boost sales on the platform. Furthermore, TikTok can also open the TikTok Shop service for foreign merchants. In Vietnam, Malaysia, Singapore, and the United Kingdom, TikTok has already allowed cross-border sellers.

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.

  • Lemon8, an Instagram-like social media platform, is gaining strong popularity among Americans. The app has jumped significantly among the rankings in the App Store and is well ahead of YouTube, WhatsApp, and Gmail.
  • The official launch of Lemon8 is slated to happen sometime later in 2023. The firm is expected to make a bigger marketing push to drive the popularity of Lemon8 among Americans, amid the ongoing tussle with the United States government. Alongside the United States, ByteDance is also planning an official launch of Lemon8 in the United Kingdom market. In Japan and Southeast Asia, Lemon8 has already gained millions of users.

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.

To know more and gain a deeper understanding of the social commerce market in the United States, click here.

Featured Reports
PayNXT360 Insights

Sign up for The PayNXT360 Insights, and get a weekly roundup of market events, innovations and data you can trust and use.

Sign Up Now

© PayNXT360, All rights reserved | Privacy Policy

Designed & Developed by Cross Atlantic