A recent report suggests that TikTok Shop plans to significantly increase its fees from 2% to 8% to improve its eCommerce operations’ profitability. The report reveals that the company has had internal discussions around its 2024 merchandise volume goal, which may change over time.
By aiming for this objective, TikTok intends to compete with Amazon, Temu, and Shein, two other Chinese-owned businesses that have become popular in the US market. However, these two companies don’t have the benefit of TikTok’s highly successful social media network, which it uses to its advantage to reach consumers through viral videos.
The exact timetable for the change is for an April 1 spike from the current 2% to a 6% fee, with an increase to 8% on July 1. But not every product will have an 8% fee. There will be reduced levies for the more expensive items, such as electronics.
TikTok Shop allows producers to tag things so that users can purchase products from in-feed and live videos. The app officially launched in the United States in September 2023. Product portfolios created by brands are viewable via their profile pages. Additionally, TikTok Shop features a separate tab where users may explore items in various categories, manage their orders, and search for different products. Users can also discover products through recommendations.
Few technological advancements in recent history have changed the world as dramatically as the advent and subsequent rise of social commerce. In 2022, social media platforms were projected to generate 992 billion US dollars in sales worldwide. In the future, online purchases made through TikTok Shop will grow in popularity. According to forecasts, by 2026, the value of sales from social commerce should approach 2.9 trillion dollars.