TikTok to expand e-commerce business into Mexico and major Western European markets amid scrutiny in the US, EU
TikTok is poised to expand its e-commerce operations into Mexico, France, Germany, Italy and Spain, as the ByteDance-owned short video platform remains under scrutiny in the United States and the European Union.
The global hit social media platform has started to invite merchants for a beta run of TikTok Shop in those markets before the in-app feature’s expected official launch this summer, according to three people familiar with the matter.
TikTok Shop, however, has tightened its criteria for merchants, one of the people said. Those eligible for Mexico, for example, must have a locally-registered entity and would initially be restricted from selling certain types of goods, such as food and jewellery.
This development would significantly broaden the presence of TikTok Shop, an in-app feature that enables users to buy goods directly from the platform, to a total of 13 markets worldwide.
TikTok Shop last year was on track to record around US$20 billion in global gross merchandise value, with Southeast Asia contributing the bulk of sales. Photo: Shutterstock
It would also mark an accelerated pace of expansion for TikTok Shop, which had dropped plans in 2022 to open its online marketplace in France, Germany, Italy and Spain after operations in the United Kingdom failed to meet internal targets and attract influencers, the Financial Times reported at the time.
TikTok did not immediately respond to a request for comment on Thursday.
ByteDance initially rolled out TikTok Shop in the UK and Indonesia in 2021, followed by five more countries in Southeast Asia in 2022. TikTok’s online marketplace feature was introduced in the US in September last year.
The US business of TikTok Shop appears to have gained strong traction. TikTok reported that more than 500,000 merchants were selling to US users on its app at the end of 2023, more than double the number from three months earlier.
Worldwide, TikTok had more than 15 million sellers as of December after adding more than 6 million in the second half of 2023, the company said in its first TikTok Shop Safety Report last week.
United States President Joe Biden speaks after signing into law a US$95-billion foreign aid bill and a measure to ban TikTok in the US at the White House in Washington on April 24, 2024. Photo: Agence France-Presse
TikTok has set a worldwide target of US$50 billion in gross merchandise value this year, according to a recent report by Chinese media 36Kr.
Meanwhile, TikTok and parent ByteDance on Tuesday filed a federal lawsuit to block a US law that would force the divestiture of the popular short-video platform’s operations in the country or ban it from all app stores nationwide. Their lawsuit argued that such a divestment “is simply not possible: not commercially, not technologically, not legally”.
US President Joe Biden on April 24 signed into law a legislative measure that would ban TikTok in America unless ByteDance divests the short video platform’s US business. Biden has set a January 19 deadline – one day before his term is to expire – but he could grant a three-month extension if he determines ByteDance is making progress.
China’s Ministry of Commerce has repeatedly said that it would oppose a forced sale of TikTok, the first Chinese app to find major success overseas. In 2020, Beijing updated its rules governing exports to include technology that covers the recommendation algorithms used by TikTok.
The EU last month started an investigation into TikTok’s spin-off Lite app, months after it announced an inquiry into whether the Chinese-owned platform breached online content rules aimed at protecting children and ensuring transparent advertising. Two days after the investigation on its Lite platform was launched, TikTok suspended that app’s rewards scheme.
