Hey, Quick Question: Is TikTok Going to Be the Next Big E-Commerce Player?

Welcome to our column, "Hey, Quick Question," where we investigate seemingly random happenings in the fashion and beauty industries.

A new report from the Wall Street Journal suggests that TikTok is taking notes from the playbooks of retailers like Amazon, Temu and Shein with its latest development.

Owned by Beijing-based ByteDance, the company is reportedly planning to roll out e-commerce in the U.S. early August. Rather than incorporating ways to buy items within the app (which it already does in Malaysia and is testing in the U.K.), TikTok is working on launching its own marketplace with products from manufacturers and merchants in China, ranging from clothes to kitchenware; similar to the "Sold by Amazon" program, it'll store, ship and deal with all related logistics.

Despite tension in the U.S. fueled by lawmakers advocating for banning the app and sharing data privacy concerns, this move could position the video-sharing app a rival with shopping platforms like Temu and Shein (which are currently facing off in multiple legal battles against each other). At an online roadshow last week, a TikTok merchant manager told the audience: "TikTok's advantage over peer platforms [Temu] and [Shein] is that we have one billion monthly active users globally," per the WSJ.

Though so much of the content on TikTok has to do with trends and product recommendations, the company hasn't capitalized so much on this way of generating revenue, instead relying on advertising sales from selling other brands' products. It has TikTok Shop, through which it does live shopping, videos accompanying products that can be purchased, "storefronts" directly under brands' or creators' profiles and more, which has brought in $4.4 billion in revenue for the company 2022, according to Bloomberg. (People familiar with the matter told WSJ that TikTok is aiming to quadruple that number, up to $20 billion globally in 2023.)

It seems TikTok is hoping to convert its active users into active spenders right there — could it be pushing to grow beyond its current perception as a video-sharing app into something bigger, potentially on the level of AliExpress?

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