TikTok Shop has seen a significant increase in orders since President Joe Biden signed a law threatening to ban the app nationwide, with a 13 percent jump in orders from April to May. The platform, which quickly became popular for its novelty and discounted items, has been a key focus for ByteDance, TikTok’s parent company. With more than half a million Shop sellers in the U.S. at the end of 2023, TikTok Shop aims to grow tenfold to $17.5 billion in sales by the beginning of 2024, making it a core part of TikTok’s overall business.
Despite the regulatory uncertainties surrounding TikTok, ByteDance has not slowed down its efforts to expand TikTok Shop in the U.S. In fact, the company has reportedly halted expansion in Europe to focus on the American market, hiring hundreds of employees to support these efforts. Creators and industry insiders have noted that TikTok’s algorithm appears to be pushing TikTok Shop content more aggressively, potentially boosting its success even further.
While some merchants on the platform have expressed concerns about the potential ban impacting their sales, TikTok Shop has already started to compete with Amazon in terms of order volume. Data from Route shows that the share of TikTok Shop orders has been increasing month-over-month, while Amazon’s share has remained relatively flat. The platform’s growth may be benefiting China-based e-commerce giants like Temu and Shein, which are rapidly growing in the U.S. and seeing increased order volume.
If TikTok were to be banned in the U.S., customers who currently shop on TikTok Shop may turn to Chinese e-commerce companies like Temu and Shein, rather than traditional retailers like Walmart or Amazon. These platforms are gaining popularity due to their focus on offering compelling and cool items at discounted prices, similar to what TikTok Shop provides. The potential ban on TikTok could further accelerate the growth of these Chinese e-commerce giants in the U.S. market.
