By Arriana McLymore and Sheila Dang
NEW YORK (Reuters) – U.S. TikTok users have spent heavily so far this holiday shopping season buying merchandise from a range of suppliers on the e-commerce platform TikTok Shop, according to TikTok estimates and a Reuters analysis of spending patterns measured by from data from Facteus.
The patterns show that TikTok Shop, which launched in the US in September 2023, has likely gained market share in e-commerce at a crucial time. TikTok Shop serves as an e-commerce channel for major brands such as elf Cosmetics and Ninja Kitchen.
TikTok Shop said in a press release in late November that sales reached $100 million on Black Friday, the day after Thanksgiving, when bargain-hunting American consumers spent heavily online. It previously stated that the number of people buying goods on TikTok Shop every month has almost tripled. Reuters could not independently verify his claims.
A US federal appeals court on Friday upheld a law requiring China’s ByteDance to divest TikTok in the US early next year or face a ban. A ban on the popular short video app could extend to TikTok Shop as well, if it happens.
“TikTok Shop is a new distribution channel and brands are doing very well on it,” said Erik Huberman, CEO of marketing agency Hawke Media, which has clients who sell products through the feature. “Frankly, there is no alternative. It will be a lost revenue stream.”
Like its rivals Shein and Temu, TikTok Shop showcases merchandise from third-party suppliers, some of which ship items from China, and compete fiercely on price. Each of the platforms has tried to lure more US sellers with lower fees to help with shipping speed.
Capitalizing on the popularity of the TikTok social media app, TikTok Shop sellers typically use advertisements and sponsored “influencers” to market their products to TikTok’s 170 million U.S. users.
Sellers on TikTok Shop fulfill customers’ orders directly, sometimes with the help of third parties or TikTok’s e-commerce fulfillment services.
For shoppers like Jasmine Whaley, 31, of York, Pennsylvania, TikTok Shop has provided a new place to shop for clothing, skin care products and Crocs (NASDAQ:). She spent almost $700 on the platform this year after seeing videos from influencers and advertisers about merchandise.
TikTok has “cracked the code” on curating content and products it likes, Whaley said. Her orders on the TikTok Shop are often delivered to her faster than orders she places on Amazon (NASDAQ:), she said.
For sellers and influencers, TikTok Shop offers so-called ‘LIVE’, live video streams that allow shoppers to purchase merchandise directly.
Nico Le Bourgeois, head of US operations for TikTok Shop, said in a statement to Reuters that the number of monthly Live sessions hosted in the US has almost tripled over the past year.
According to third-party data firm Facteus, U.S. spending on TikTok Shop surpassed spending on Shein and Temu in the seven days leading up to Cyber Monday, December 2, a heavy online shopping day. Facteus said the data comes from 140 million consumer debit and credit cards, which represent 7% to 10% of all U.S. spending.
