FB Pixel no scriptTikTok sticks to ambitious US e-commerce targets despite slow start to 2024 | KrASIA

TikTok sticks to ambitious US e-commerce targets despite slow start to 2024

Written by 36Kr English Published on   2 mins read

ByteDance-owned TikTok remains committed to the US market despite recent setbacks.

36Kr has exclusively learned that TikTok has set a gross merchandise value (GMV) target of USD 12–13 billion for the US market in the second half of 2024, with its global selling (cross-border) business contributing about one-fifth of this amount. ByteDance has not responded to inquiries about this data.

At the beginning of 2024, TikTok aimed to expand its US GMV tenfold. Currently, TikTok has 170 million monthly active users in the US. TikTok Shop launched in the US in September 2023, and by the end of last year, its daily GMV was USD 14 million.

Considering TikTok’s past performance and the challenges faced in the US during the first half of this year, the second-half target is ambitious. Multiple sources have expressed concern about achieving this goal, as TikTok’s US e-commerce performance in the first half fell below expectations. According to data from Tabcut, from January to May 2024, TikTok’s total closed-loop GMV in the US was less than USD 2 billion. Assuming the accuracy of Bloomberg’s report that the company’s full-year US target is USD 17.5 billion, only 11% of the goal has been met in five months.

Sentiments circulating within ByteDance and among merchants have alluded to “poor platform performance,” with insiders suggesting that target adjustments are possible.

Under pressure, aggressive actions are unfolding in the market. An e-commerce agency working with TikTok revealed to 36Kr that platform entry requirements in the US have changed several times in the past six months. Using Amazon as an example, last year, the US platform required partner stores to rack up annual sales of over USD 2 million and have at least one product ranking within the top 100,000 on Amazon. After the ban turmoil, merchants only needed total platform sales of over USD 2 million to join.

This initially led to an influx of merchants and ads, but the threshold was later raised again to over USD 2 million on a single platform like Amazon, though still more lenient than last year.

Additionally, the threshold for influencers in the US to apply for product promotion has been lowered from 5,000 followers to 1,000 followers. Starting from May 15, influencers in the UK can also sell US products in their storefronts.

Despite the significant impact of the two votes earlier this year, TikTok remains focused on the US market.

On May 7, TikTok and its parent company ByteDance filed a lawsuit in the US, alleging that the requirement to divest TikTok violated the rights of its 170 million US users.

In mid-May, TikTok held a small closed-door meeting in Shenzhen, inviting major domestic sellers to participate. Reportedly, at this meeting, TikTok officials said that, despite political pressure, the platform remains optimistic about its prospects in the US market. Even in the worst-case scenario, TikTok has contingency plans lined up.

KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Zhang Rao for 36Kr.


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