TikTok is launching an e-commerce business in the United States to sell made-in-China goods, the Wall Street Journal reported.
The program will sell clothes, electronics and household goods from Chinese manufacturers, similar to the way Amazon’s “Sold by Amazon” program works, and will handle marketing, transactions, logistics and after-sale services, the Journal reported. It will launch in August.
TikTok has been working on plans to offer a third-party sellers’ platform in the U.S. but delayed a wider launch of that program due to American businesses’ reluctance to join because of political uncertainty over TikTok’s future, the report noted.
TikTok’s newest digital effort is meant to compete with Chinese retail shopping platforms Shein, which sells fashion apparel and accessories, and Temu, which sells a wide range of goods from shoes to automotive equipment to home goods.
Bryan Gildenberg, managing director of Retail Cities, told CNBC that the nature of how products are discovered has changed fundamentally because of TikTok and its engagement. Algorithmically, it’s harder for advertisers to manipulate and control, he said. “As a result, all of the things that connect to TikTok are different from the things that connect to Instagram or Facebook or YouTube, which are platforms that large advertisers understand better.
“So, it created an opportunity for Shein and Temu … that natively understood that randomized, gamified, algorithmically driven demand generation and matched the footprint of TikTok with their own footprint.”