TikTok Plans To Ban links To Outside E-Commerce Sites like Amazon

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TikTok is planning to ban links to outside e-commerce links, such as Amazon; according to a new report. The reported move is seen as a way for the company to force people to use TikTok Shop if they want to purchase an item that they see on the app. The report also says TikTok Shop is on track to lose more than $500 million in the U.S. this year.

The $500 million loss reflects the company’s deep investment in hiring, creating a delivery network and subsidizing merchants that offer discounts and free shipping. By banning outside e-commerce links, TikTok would prevent creators from promoting things like kitchen items and furniture that are available on their Amazon storefront. If someone buys an item listed on an influencer’s Amazon storefront, the influencer makes a small commission. With these reported changes, creators would no longer be able to do so.

Although it is unknown when TikTok plans to introduce the ban; once it does go into effect, TikTok users will only be able to purchase items promoted by creators through TikTok Shop. Some TikTok Shop links let users buy products directly from videos, while some creators have TikTok Shop storefronts embedded in their profiles.

Going forward, this would be the only way to link products for purchase in the app. The reported move is seen as a way for TikTok to boost sales on its Shop; which currently is not seeing much traction. Consumers in the U.S. are currently spending around $3 million to $4 million a day on TikTok Shop; up from around half a million to $1 million a day in June, the report says. TikTok staffers expect this number to exceed $10 million by the end of the year.

TikTok Shop is a lot more successful in Southeast Asia; where it has been available since 2021. In Southeast Asia, TikTok Shop’s daily gross merchandise volume is around $50 million to $60 million. TikTok hopes to increase this number to around $90 million by the end of the year.

Parent company, ByteDance wants TikTok to create an international online shopping business similar to Douyin; which had a merchandise volume of more than $200 billion last year. The company hopes TikTok can reach similar levels by 2028. Of the $200 billion, ByteDance hopes to generate around $40 billion to $60 billion in revenue from the U.S.

 

 

 

 

 

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