TikTok is officially rolling out its TikTok Shop marketplace and services to U.S. users this week.
The shopping marketplace, which has been in testing mode since November 2022, is baked directly into the TikTok video app. As of Tuesday, it features a range of items for sale, such as curling irons, T-shirts and headphones from third-party sellers, in addition to products sold by verified American companies like fashion retailer Revolve and cosmetics company Morphe.
"TikTok Shop will now bring shoppable videos and LIVE streams directly to For You feeds across the country — and give brands, merchants, and creators the tools to sell directly through shoppable content on the TikTok app," the company said on its website.
The U.S. rollout of the TikTok Shop follows its success in South Asian markets such as Indonesia.
Other e-commerce features being rolled out include a dedicated Shop tab, which allows businesses to display their products on the new product marketplace and customers to easily search and discover promotions, a TikTok spokesperson told CBS MoneyWatch.
"In the Shop tab, product recommendations are showcased via product listings and shoppable content, and customers can manage orders, all within a single tab," the spokesperson said. About 40% of users currently have the Shop tab available in the app, the company said.
Challenges within U.S. market
To be sure, the fledgling platform faces a number of challenges in the U.S., not least of which being that lawmakers here see the Chinese-owned social network as a national security risk and according to Bezinga.com.Other concerns include product authenticity and data security,
But breaking into e-commerce hasn't been easy for social media platforms in general. Social networks, such as Instagram and Facebook, have pulled back from initiatives to hock goods directly to users, Digiday reported.
TikTok Shop is on track to lose more than $500 million in the U.S. this year, according to an August report from The Information.
Still, TikTok has a massive user base to which to sell. The app has skyrocketed in popularity in the U.S., amassing more than 150 million American users, the company said in a statement earlier this year. It has also become the second-most popular app among teens after YouTube, a Pew Research study from 2022 shows.
TikTok Shop has already experienced massive success in South Asia. In Indonesia alone, TikTok has more than 100 million active users, who spend more than 100 minutes on the app a day, on average, according to Bloomberg.
The shopping platform strives to reach $20 billion in merchandise sales this year, more than quadruple that from last year, Bloomberg reported. The U.S. market, where retail e-commerce sales totaled $871 billion in 2021 and have grown at an average rate of 16% annually since 2011, according to data from advisory firm FE International, could play an essential part in TikTok Shop's achieving that goal.
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