TikTok is reportedly preparing to roll out heavy holiday discounts starting next month.
A report Saturday (Sept. 16) by Bloomberg News, citing internal documents, said the social media app is hoping these bargains can attract consumers to its newly launched marketplace as it aims to compete with Amazon and Walmart.
According to the report, TikTok is offering to subsidize discounts of as much as 50% to get sellers to take part in its Black Friday program, which will run from Oct. 27 through Nov. 30.
PYMNTS has contacted TikTok — owned by Chinese tech giant ByteDance — for comment but has not yet gotten a reply.
TikTok — which has 150 million American users — launched its shopping platform to a nationwide audience in the U.S. last week after testing it last year.
“TikTok Shop will now bring shoppable videos and LIVE streams directly to For You feeds across the country — and give brands, merchants and creators the tools to sell directly through shoppable content on the TikTok app,” the company said in its announcement.
The shopping feature includes a product showcase, where users can browse product tiles, read reviews and purchase directly from a favorite brand’s profile. There is also an affiliate program, where creators and merchants connect via “commission-based product marketing opportunities” that let creators “monetize their creativity” by sharing products in short videos and livestreams.
The Bloomberg report, citing data from Deloitte, notes shoppers are projected to spend as much as $284 billion during this year’s holiday season.
However, as PYMNTS wrote last month, recent earnings reports from retailers may suggest some hesitancy by consumers heading into the holiday season, as well-known merchants struggle to pull in sales and strengthen their customer bases.
“While overall consumer spending on the rise, albeit unevenly, is undoubtedly good news, these discretionary retailer earnings releases may more accurately reflect that consumers’ attitude towards spending is more subdued,” that report said.
An ongoing sentiment toward pulling back was also seen in PYMNTS’ July “Consumer Inflation Sentiment” report, which showed that consumers predict that inflation will continue approximately into March 2025, much in line with the Federal Reserve’s projections.
Meanwhile, although spending may be up, debt held by U.S. households is up as well. Recent Federal Reserve data on big bank loan performance showed household debt hitting $17 trillion in the second quarter of the year, with estimated credit card debt in recent months surpassing $1 trillion. In addition, recent bank earnings note rising delinquency and charge-off rates.
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