Shillong, August 24: The Chinese short-form video app TikTok is reportedly preparing to prohibit links to external e-commerce websites like Amazon as it enhances its shopping offerings in the US.
This strategic move is perceived as an effort to drive users toward utilizing TikTok Shop if they intend to purchase items they encounter on the app, as indicated by ‘The Information’.
TikTok’s shopping platform, TikTok Shop, is projected to incur losses exceeding $500 million in the US this year, according to sources mentioned in the report.
As per IANS, this deficit reflects TikTok’s substantial investments in workforce expansion, establishing a delivery network, and subsidizing vendors that offer considerable discounts and free shipping.
Despite the financial challenges, TikTok Shop’s daily transaction volume is noteworthy, with US consumers spending roughly $3-$4 million per day. The company anticipates this figure to surpass $10 million by the year’s end.
Launched by ByteDance, the parent company of TikTok, in 2021, TikTok Shop initially debuted in Indonesia and has since gained significant traction, particularly in Southeast Asia.
In response to TikTok’s expanding shopping venture, e-commerce giant Sea has announced plans to increase investments in its online shopping business, Shopee, across all markets.
However, TikTok has faced security concerns. Recently, New York City banned the use of TikTok on city-owned devices due to these security worries. City employees are prohibited from downloading, using the app, or accessing the TikTok website on such devices.