amazon’s silent competitor is… tiktok?

Move over Prime, TikTok Shop is here, and the girls are eating it up. With similar products to Amazon, equally as fast shipping, fair price points, and creator-backed promotion - TikTok Shop is taking the platform by storm. Launched in September 2023, the shopping program marks the app’s first e-commerce efforts in the US, with Tik Tok “looking to quadruple its merchandise sales by the end of the year to hit $20 billion, according to Bloomberg”.

While it is too early to gauge the financial demand generated by US Shops, the potential is apparent as seen by other Shop markets. Available in Asian markets since 2021, the Shops feature taps “a population of 630 million – half of them under 30. Asia “is one of TikTok’s biggest markets in terms of user numbers, generating more than 325 million visitors to the app every month, according to Reuters”. In August, TikTok was slated to capture 13.2% of the e-commerce market in Southeast Asia, and was projected to hit $15 billion in gross merchandise volume, up +240% YoY(Tech in Asia).

When analyzing top-selling categories, beauty, and personal care drive the Asian market, a  similar trend was reported across the UK. According to an article by Cosmetics Business cosmetics “Make-up has ranked as the top-selling beauty category on TikTok Shop in the UK. The color cosmetics category represented 42% of all sales made on the platform over the past 12 months, according to consumer insights firm NIQ. This was followed by skin care and hair care, with sales amounting to 25% and 11% respectively”.

What does this mean for the future of shops? Built directly in the app, this feature is paving a new lane for users, consumers, and creators on the app. TikTok Shop provides a new and holistic shopping experience, with users able to directly purchase items within the app, backed by reviews from their favorite creators in app. Creators have a new means of generating revenue, receiving commission from shop items they promote. And brands able to generate e-commerce sales via new platforms. 

While all promising, TikTok has many hurdles to overcome. As a social platform, the app still faces backlash around security in the US, pushback from Southeast Asian markets like Indonesia who wish to regulate Shops, and limited live markets for Shops (currently only available in Malaysia, the Philippines, Singapore, Thailand, the United Kingdom, the United States, and Vietnam). All of which are impeding on the scale of Tik Tok Shops, and its ability to become a viable competitor to e-commerce tycoons like Amazon.