TikTok to expand e-commerce to the US and Brazil in search of new revenue

TikTok has also reportedly been planning to build out its own product fulfilment centres in the US, according to an Axios report last week, which would give it control of another element of its e-commerce supply chain and open up another front in its challenge to Amazon.

TikTok Shop, a marketplace built into the TikTok app that facilitates transactions while users watch short videos and live streams, has already launched in the UK and six Southeast Asian countries, including Singapore and Indonesia. The Americas are next in the expansion plans as TikTok focuses more of its attention on the new service.

The launch for the US is planned by the end of the year and for Brazil by the first half of 2023, an accelerated timeline over its previous plan to launch in the South American country in the latter half, Chinese media LatePost reported.

Huang Yuanjian, former international product head at ride-hailing giant Didi Global, will be in charge of TikTok Shop’s marketing in Brazil, according to LatePost.

The platform, which surpassed 1 billion monthly active users last year, has set a goal of reaching 1.05 billion daily active users (DAUs) by the end of this year, the report also noted. TikTok currently has more than 800 million DAUs.

TikTok did not immediately respond to requests for comment on Tuesday.

ByteDance’s flagship business has been searching for new sources of revenue as it has struggled to turn a profit. TikTok reported that operational losses in Europe, including the UK, widened in 2021 to US$901 million from US$654 million the previous year. Turnover rose fivefold to US$990 million, according to a corporate filing to the UK’s Companies House earlier this month.

In Asia, however, TikTok Shop has found some initial success. After expanding into Southeast Asia earlier this year, sales campaigns over the summer helped boost its profile. In August, a week-long event in Singapore saw daily gross merchandise volume (GMV) triple compared with the previous week, a TikTok representative said at the time.

TikTok plans to continue running the campaigns through the end of the year, according to the official TikTok Shop account on Tencent Holdings’ WeChat. If TikTok Shop launches in the US this year, it could also leverage increased consumer spending during the holiday season.

TikTok has been facing a growing political backlash in the US over data privacy and national security concerns related to its ownership by a China-based company. However, there are signs that some of its biggest troubles could be near an end. The administration of President Joe Biden has drafted a preliminary agreement with TikTok to resolve these concerns, The New York Times reported last month.