📈 Expansion into New Markets
TikTok is expanding its e-commerce operations to Mexico, France, Germany, Italy, and Spain. The ByteDance-owned platform is inviting merchants for a beta run of TikTok Shop in these markets before its expected official launch this summer. This move broadens TikTok Shop's presence to 13 markets worldwide. Last year, TikTok Shop recorded about $20B in global gross merchandise value, with Southeast Asia contributing the majority of sales.
🛒 Criteria for Merchants
TikTok Shop has tightened its criteria for merchants in the new markets. For example, those eligible in Mexico must have a locally-registered entity and will initially be restricted from selling certain types of goods, such as food and jewelry. This careful selection aims to ensure a smooth launch and quality control of the products sold through the platform.
🌍 Global Expansion Efforts
TikTok Shop first launched in the UK and Indonesia in 2021 and expanded to five more Southeast Asian countries in 2022. In September 2023, TikTok Shop was introduced in the US, gaining strong traction with over 500,000 merchants by the end of the year. TikTok aims to achieve $50B in gross merchandise value globally in 2024, according to Chinese media 36Kr.
⚖️ Legal Challenges
Despite its global expansion, TikTok faces significant legal challenges. The US and EU have scrutinized TikTok's operations due to concerns about data privacy and security. On April 24, 2024, President Joe Biden signed a law that could ban TikTok in the US unless ByteDance divests its US operations. TikTok and ByteDance have filed a federal lawsuit to block this law, arguing that divestment is not feasible. Meanwhile, the EU is investigating TikTok's Lite app for potential breaches of online content rules.
Will TikTok's e-commerce expansion overcome legal hurdles?
