TikTok plans to expand the size of its global e-commerce business this year to roughly $20 billion in merchandise sales. According to Bloomberg, who first reported the news, this is a sizeable endeavor from the $4.4 billion in gross merchandise value the company generated last year.
TikTok’s Path to E-Commerce
With consumer buying behavior evolving at such a rapid pace, TikTok has remained on the forefront of e-commerce shopping. The company has played a vital role in the consumers’ purchase journey, from finding new products to making their purchases, and creating content that powers post-purchase engagement.
More consumers are purchasing goods from social media platforms such as TikTok thanks to influencers and their “shoppertainment” content. Social commerce is continuing to gain traction as it delivers instant gratification and purchase satisfaction to customers.
Through its TikTok Shop, users can purchase items as they scroll through a feed of short videos and livestreams within the social media application. The hope is that it would become top-of-mind for shoppers as an alternative to e-commerce giant Amazon.
We’ve covered how the BNPL space has leveraged the discovery feed feature on TikTok to create a similar, more personalized shopping experience for consumers.
TikTok Threatened by Ban in the U.S.
As TikTok amplifies its e-commerce efforts, the company is also facing scrutiny from U.S. government officials that claim the popular social media app is a security risk, with concerns that the Chinese government could have easy access to user devices and U.S. user data via the app.
Late last year, the U.S. government approved the ban of TikTok on federal government devices. This May, Montana’s governor Greg Gianforte signed a bill, banning TikTok usage across the entire state.
Despite the cold shoulder given to TikTok in the U.S., the Chinese-owned company is not backing down. In fact, it will continue to seek out profitable partnerships with U.S. brands and merchants to gain strategic advocates as it gears up for their defense in Washington courts.
To address security concerns, TikTok’s website reveals that it has partnered with HackerOne to manage a vulnerability disclosure program and claim to have best-in-class infrastructure and processes.