TikTok is looking to grow the size of its TikTok Shop U.S. business tenfold to as much as $17.5 billion this year, according to a new report from Bloomberg. The report indicates that the 2024 merchandise volume goal was recently discussed internally within the company, and could be amended as the year progresses.
With this goal, TikTok would not only be looking to take on Amazon, but also fellow Chinese-owned companies Temu and Shein, both of which have become popular in the U.S. But TikTok has something the other two companies don’t, which is an extremely popular social media network that could leverage viral videos to reach buyers.
As Bloomberg previously reported, TikTok was on track to amass around $20 billion in global gross merchandise value last year. A majority of the sales were seen in Southeast Asia. TikTok is now interested in bringing that success to the U.S. In addition, the report says the company is planning to launch TikTok Shop in Latin America in the coming months.
“The speculated US merchandise sales figures represented by Bloomberg are inaccurate,” TikTok said in a statement.
The report indicates that during the Black Friday and Cyber Monday season in November, more than 5 million new U.S. customers purchased something via TikTok Shop. For context, the social media app currently has around 150 million users in the U.S.
The news comes a day after The Information reported that TikTok will start raising the commission it charges on most items from 2% up to 8% per transaction. TikTok Shop has also started to reduce some subsidies for merchants. It’s worth noting that these commissions are still considerably lower than Amazon seller fees, which are about 15% for most product categories.
TikTok Shop, which officially launched in the U.S. in September 2023, lets creators tag products to allow users to buy products from in-feed videos and live videos. Brands can make their own product portfolios, which can be accessed from their profile pages. TikTok Shop also has a dedicated tab that lets users search for different items, discover products through recommendations, browse items in different categories and manage their orders.