TikTok reported that more than 500,000 merchants were selling to US users on its app at the end of 2023, more than double the number from three months earlier, as the video service stepped up its e-commerce effort.
Worldwide, TikTok’s e-commerce platform had more than 15 million sellers in December, adding more than 6 million in the second half of the year, the company said on Tuesday (Apr 30) in its first TikTok Shop Safety Report.
The report underscored TikTok’s growth in e-commerce, as well as the ways it’s trying to keep shoppers safe. The company, owned by China-based ByteDance said it blocked 2 million sellers from the app for failing to meet its policy requirements and removed 1 million for violating those guidelines.
E-commerce is seen by TikTok as its next big potential revenue source, as well as a way to keep users spending time and money on its app. After starting Shop in South-east Asia, the company has expanded to markets like the UK and, last year, the US. Users can shop through products tagged in both posted and live-streamed videos from their TikTok feed, or from the Shop marketplace tab that’s more like a traditional e-commerce site.
“While your traditional model might be scrolling through a list of products on a web page, we’re aiming to create an experience where it’s something more entertaining and engaging than that,” said Mary Hubbard, head of governance and experience for TikTok Shop Americas. “We want people to feel that their shopping experience is tailored and relevant to them, in the same way that they feel their ‘For You Feed’ is. Our focus is making sure the experience is a positive one, whichever way they do it.”
TikTok has faced heightened scrutiny over its parent company and the potential for the Chinese government to acquire user data or influence what people see on the app. The US Congress last week passed a law requiring ByteDance to divest its stake in TikTok by January or face a ban in the country. TikTok has said the Chinese government can’t access user data or influence the app and has threatened to take legal action to overturn the law.
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The company said it spent more than US$400 million on platform safety as it expanded the e-commerce effort and increased its governance team for the shopping site to more than 7,500 people in 2023. The company blocked more than 37 million products from appearing on the app in the second half of the year and removed 133,000 after listing for policy violations, TikTok said in its report. The company monitors for things like fraud, counterfeit products and intellectual property infringement.
“In general, I think as people become more familiar with our policies and safeguards we’ll see the types of violations change,” Hubbard said. “On Day 1, a seller might not be as familiar with the paperwork they need to provide as Day 365, for example.”
In addition to merchants, approved users can link products in their videos and livestreams and make a cut of sales made through the app. TikTok said it removed the e-commerce features from more than 500,000 creator accounts worldwide for policy violations in the last half of the year. BLOOMBERG
