Topline
TikTok is expanding its empire and launching an e-commerce business to sell Chinese-made goods in the U.S., the Wall Street Journal reported Tuesday, as the fast-growing social media app attempts to compete with other online shopping platforms like Shein and Temu.
TikTok’s new e-commerce business will compete with rivals Shein and Temu.
Key Facts
Beginning in August, the social media platform will offer an Amazon-like marketplace called TikTok Shop Shopping Center, which will allow users to go to one place to view and buy goods, according to the Journal, which cited unnamed sources.
Everything from clothes to electronics will be manufactured and sold in China and then shipped to U.S. customers from both TikTok’s program and other retailers, with TikTok handling marketing and logistics, the Journal reported.
Chinese suppliers will only be paid by TikTok after finding U.S. buyers, and if items are unpopular the platform plans to return those items to the suppliers to avoid being stuck with inventory, people familiar with the matter told the Journal.
With the new platform, TikTok is aiming to increase the total transaction amount of goods on the platform from $5 billion last year to $20 billion this year, the paper reported.
Key Background
TikTok’s e-commerce business will soon have to compete with Temu and fast-fashion platform Shein, which have been offering online customers shockingly low prices and a wide variety of selection. Temu, a Boston-based Chinese-owned retailer, has seen increased success this year from a popular Super Bowl ad and TikTok exposure. Temu has claimed the way it keeps prices low is by “cutting out the middleman” by allowing Chinese vendors to sell directly to American buyers and shipping directly from China. Meanwhile, Chinese-based Shein has become one of the most popular clothing