TikTok Shop - disruptor or hot potato?

TikTok Shop - is currently competing against marketplaces in both Asia and Europe.

In South East Asia, TikTok Shop is competing against horizontal marketplaces such as Lazada (owned by Alibaba), Shopee (Owned by Sea), and Tokopedia (owned by GoTo, the merged entity of Gojek and Tokopedia).

TikTok Shop competes with eBay, Amazon, and Walmart in Europe and the US. Amazon has taken noticed and have experimented with adding a TikTok like feed to its marketplace.

At its most fundamental TikTok Shop is a cross-border platform that enables Chinese manufacturers to reach Generation Z consumer. Its important to note that TikTok Shop is only active in three markets - Indonesia, UK and the US. Last week, Indonesia threatened that it will ban or shutdown TikTok Shop due to it being monopolistic In Indonesia, TikTok Shop does not have a payments licence nor does it have native logistics solutions.

Could we see regulators getting involved with TikTok Shop to ensure that the company does not block links to other platforms?

TikTok Shop currently has a complicated relationship with Shopify as Storefront functionality will now longer be available to Shopify merchants. According to the Information, TikTok will likely take a $500m loss to grow TikTok Shop in 2023.

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However, TikTok execs told The New York Times that more than 90% of sellers on TikTok Shop were based out of the U.S.