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TikTok’s shopping service struggles to attract U.S. merchants

TikTok Shop, the social media app’s nascent shopping service, is struggling to gain traction among U.S. merchants, who are focused on expanding their brick-and-mortar businesses and concerned that the app could be banned. In contrast, overseas sellers are keen for a new way to tap into the world’s second-largest e-commerce market, but TikTok has blocked foreign merchants from selling on the U.S. version of the service. As of last month, the number of U.S. merchants actually selling their goods directly on TikTok Shop was less than 100, according to a person briefed on the matter. TikTok Shop is only open to individual merchants that are legal U.S. residents or businesses registered in the U.S., according to TikTok’s registration guidelines.

TikTok’s U.S. shopping push marks an effort to replicate the success of Douyin, its ByteDance-owned sibling app, which is popular in China. Douyin has built a substantial shopping business, with e-commerce transaction volume surging 76% last year to $205 billion. TikTok’s e-commerce business has already gained traction in Southeast Asia, where TikTok Shop’s volume last year more than quadrupled to $4.4 billion.

TikTok Shop is only open to individual merchants that are legal U.S. residents or businesses registered in the U.S., according to TikTok’s registration guidelines. In theory, TikTok’s U.S.-only policy should appeal to American sellers, who have often expressed frustration with the crowds of foreign merchants on Amazon and Walmart. They accuse Chinese merchants in particular of using sketchy tactics like selling counterfeits and buying fake reviews with impunity.

Sellers who use TikTok Shop set up storefronts directly on their TikTok profiles, allowing users to seamlessly browse and buy items without leaving the app or using a pop-up web browser. TikTok also encourages brands to host live shopping streams, where influencers hawk products users can buy through TikTok Shop. However, planning and producing livestreams is a time-intensive process requiring the right type of on-camera talent.

The limited success of similar shopping features launched by other social media platforms makes merchants leery of committing to features that could be scaled back or taken away with little notice. Brands are reticent to fully commit to TikTok’s shopping service.

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