TikTok Shop, Amazon's New Rival in 2024?
TikTok is now among the most used social networks in the world, with one billion active users each month. Its primary target? The 18-24 age group, which accounts for 420 million users (or 38.5% of its audience). The development of this platform is such that TikTok is raising its ambitions a notch for 2024. Its new project: an integrated online shopping platform.
In the United States, the video sharing application launched into online commerce in September 2023 (after a conclusive testing phase initiated in November 2022).
17.5 billion dollars
this is the amount TikTok hopes to rake in through this service in the United States, in 2024 (ten times more than in 2023).
Source: Bloomberg
Do these ambitions foreshadow a threat to other online commerce giants like Amazon, Temu, or Shein? For now, TikTok is still far from it.
TikTok's Marketplace, simply titled Shop, allows hundreds of thousands of third-party merchants to more easily reach potential consumers. The app, with its endlessly scrollable content, thus blends entertainment and impulsive buying. This strategy seems particularly effective: the company assures that 5 million people made a purchase via TikTok in November 2023, shortly after the launch of the commerce platform.
To boost its sales, the application heavily relies on influencers. Thanks to their popularity, they can effectively promote marketplace products with content created for this purpose. A method that has proven successful in reaching a wide audience, but raises certain questions (manipulation, ethics of consumption...).
By the way, TikTok takes a commission for each order made. The platform also charges particularly low fees to merchants, while subsidizing certain products to offer very low prices.
This online commerce model has proven convincing in China: 258 billion euros in turnover was generated last year. However, TikTok's offensive has so far had no effect in the United Kingdom. Enough to encourage the platform to delay its expansion plans in Europe.
References:
- TikTok - Introducing TikTok Shop
- Bloomberg - TikTok Eyes $17.5 Billion Shopping Business on Amazon’s Turf
- TikTok in key figures and statistics in France and the World
[Cover photo: Parker Coffman]
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