TikTok is reportedly planning to create a marketplace called the Tiktok Shop Shopping Center. This platform will allow American users to store and ship various items, such as clothes, electronics, and kitchen gadgets, on behalf of manufacturers and merchants in China.
The idea is to sell products made in China directly to consumers, which will help TikTok compete with popular shopping platforms like Shein and Temu. The new online retail store will be launched in the U.S. version of the app as a dedicated e-commerce tab, enabling it to also compete with Amazon.
As part of this initiative, TikTok will purchase its own inventory and take care of tasks like logistics and customer service. This move could enhance TikTok’s ability to compete in the e-commerce market and offer a wider range of products to its users.
The upcoming shopping store is said to be different from TikTok’s current Tiktok Shop feature (shown as a shopping bag icon). With the TikTok Shop, brands can sell their products on the platform by paying a small commission.
TikTok accidentally revealed its plans for the new shopping store when it published a job listing for the role of a “Global E-Commerce Shopping Center Operations.” They referred to the new store as a “central hub” where customers can find sales promotions and manage orders.
According to the Wall Street Journal, TikTok’s approach involves paying Chinese suppliers only after they find buyers in the US. They will also return unpopular items to avoid holding excess inventory. The company aims to expand the program to include merchants from outside China and create an international settlement and logistics system.
The U.S. government has asked ByteDance to sell TikTok or the app could be banned in the country. This raises the question of what would happen if TikTok launched its new e-commerce initiative in the U.S.
WSJ’s report noted the initiative was earlier delayed because the American merchants were hesitant to join due to political uncertainty surrounding the app’s future. The company has had difficulties with its initial plans to create a third-party sellers’ platform in the U.S. and is currently under increased scrutiny in Washington. Officials and lawmakers have labeled it a national security risk.
The above factors will definitely have an impact on the company’s e-commerce strategy. This is because TikTok would lose access to a large and growing market.
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