Article by Arriana McLymore and Sheila Dang
New York (Reuters) – American users of the popular short video app, TikTok, have been making substantial purchases from diverse sellers on TikTok Shop, the app’s e-commerce platform, this festive season. These findings are based on the app’s own estimates and an examination of spending trends conducted by Reuters, using data from Facteus.
The data suggests that TikTok Shop, which was introduced in the U.S. in September 2023, has likely seized a significant portion of the e-commerce market at a crucial time. Major brands such as e.l.f. Cosmetics and Ninja Kitchen, among others, use TikTok Shop as an e-commerce outlet.
In a press statement released in late November, TikTok Shop announced that its sales had hit the $100 million mark on Black Friday, the day following Thanksgiving, a popular period for American consumers to shop online. The platform also claimed a nearly threefold increase in the number of monthly shoppers, although Reuters was unable to independently confirm these figures.
A U.S. federal appeals court recently upheld a law that mandates ByteDance, the Chinese parent company of TikTok, to divest the app in the U.S. by early next year or risk a ban. Such a ban could potentially extend to TikTok Shop.
“TikTok Shop is a fresh avenue for distribution, and brands are thriving on it,” commented Erik Huberman, CEO of marketing agency Hawke Media, whose clients use the platform to sell their products. “In all honesty, there is no substitute. It would mean a loss of revenue.”
TikTok Shop, similar to competitors Shein and Temu, displays merchandise from third-party sellers, some of which ship from China, and competes fiercely on pricing. Each of these platforms has sought to attract more U.S. sellers by offering lower fees to improve shipping times.
Taking advantage of TikTok’s immense popularity, TikTok Shop vendors typically use ads and sponsored influencers to market their products to the app’s 170 million U.S. users.
Merchants on TikTok Shop directly fulfill customers’ orders, sometimes using third parties or TikTok’s e-commerce fulfillment services.
For consumers like Jasmine Whaley, 31, from York, Pennsylvania, TikTok Shop has become a new marketplace for fashion, skincare products, and Crocs. She has spent nearly $700 on the platform this year after viewing videos from influencers and advertisers promoting merchandise.
Whaley noted that TikTok has “cracked the code” on curating content and products that appeal to her. She also mentioned that her orders from TikTok Shop often arrive faster than her Amazon orders.
TikTok Shop also provides a feature known as “LIVE,” where merchants and influencers can host live video streams and sell merchandise directly to viewers.
Nico Le Bourgeois, the Head of U.S. Operations for TikTok Shop, told Reuters that the number of live sessions hosted monthly in the U.S. has nearly tripled over the past year.
Facteus, a third-party data firm, reported that U.S. spending on TikTok Shop surpassed spending on Shein and Temu in the seven days leading up to Cyber Monday, Dec. 2, a significant online shopping day. According to Facteus, its data is derived from 140 million consumer debit and credit cards, which represent 7% to 10% of all U.S. spending.
