TikTok, TikTok, Time May Be Running Out for External Ecommerce Links

August 30, 2023

2 min 42 sec read
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TikTok has a plan that's raising eyebrows faster than your blood pressure on a stressful day at the office. According to Fashion Network and other reports, TikTok Said To Be Mulling Ban on External e-tail Sites Links. Officially, TikTok denies the rumors, but it could all be part of a larger plan to make the company a one-stop user shopping experience.

Circle with a diagonal slash over computer and shopping cart indicating no external shopping links
The rumor suggests this move is TikTok's master scheme to corral everyone into their own TikTok Shop amusement park, which is about as sneaky as that roller coaster ride where the only way to exit is through a gift shop.

Here's the catch, though. TikTok Shop is currently a little off the rails because they're losing more cash than a magician's disappearing act. According to reports, the TikTok Shop is on a fast track to losing $500 million in the U.S. this year, due to the investment in hiring, creating a delivery network, and subsidizing merchants offering discounts and free shipping.

It appears that ByteDance, the company that owns TikTok, is taking a page from its Chinese sibling app, Douyin's, playbook by banning links to outside ecommerce sites, which will allow them to ramp up sales and possibly get the financial fun park they want.

Consumers in the U.S. currently drop about $3 to $4 million a day in the TikTok Shop, which is up from about half a million to $1 million per day in June. ByteDance hopes to see over $10 million by the end of the year.

In Southeast Asia, where it has been available since 2021, TikTok Shop is substantially more profitable, with daily merchandise volume clocking in at a whopping $50 to $60 million. The company hopes to see $90 million a day by the end of the year.

ByteDance wants TikTok to establish an international online shopping business like Douyin, which bagged $200 billion in merchandise volume last year. If ByteDance has its way, TikTok will see similar numbers by 2028.

Currently, TikTok is wooing merchants with the #9 love potion, hoping to bring them to the platform by having its employees review bestselling items on sites like Amazon and then reaching out to those merchants to invite them to the TikTok Shop. Okay, so it sounds a little like poaching, but all is fair in love, war, and business. One technique TikTok uses to entice these merchants is to offer zero commissions for the first three months.

ByteDance isn't relying solely on TikTok in its quest for online shopping dominance. The company is testing a new in-app shopping section called "Trendy Beat" that offers products shipped and sold by a subsidiary of ByteDance. The feature is being tested in the U.K. but will likely soon see the light of day in the U.S. since TikTok filed a trademark application in the good ol' USA for Trendy Beat in May.

And if you're looking for mystery and intrigue, how about "Project S?" This is how ByteDance refers to its plan for world domination in the shopping game by using TikTok to start selling its own products in the video app, using TikTok's knowledge of products that gain popularity. This will let ByteDance, which uses a network of suppliers, produce the products.

Have you ever heard the phrase, "TikTok made me buy it!" Of course, you have. Go ahead and double-check us. The phrase has 7.4 billion views on TikTok, and the hashtag has 67 billion. No, it's not as many cheeseburgers as McDonald's has sold since it was founded, but it won't be long at this rate. And there's a good reason. The phrase exists because of the app's ability to make us whip out our credit cards for the all-important impulse purchase.

So, if predictions are accurate, TikTok is doing away with storefronts and links to outside ecommerce sites to keep the business for itself.

Only time (TikTok on the clock) will tell how successful this bid for sales supremacy will be.

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