CareCredit - Women's Health April 2024

Report: TikTok Targets $17 Billion in US eCommerce Volume

TikTok Shop on phone

TikTok reportedly hopes to expand its U.S. eCommerce business to $17.5 billion this year.

That ten-fold increase, the subject of a Wednesday (Jan. 3) Bloomberg News report, sets the stage for the company to become a larger threat to rivals such as Amazon, Shein and Temu.

The report, citing sources familiar with the matter, said the 2024 merchandise volume target for the U.S. version of TikTok Shop was discussed recently in internal meetings.

Sources also told Bloomberg that in addition to expanding sales in the U.S., it also hopes to do so in Latin America, where it plans to bring its eCommerce offering in the months to come.

The company told Bloomberg that the “speculated US merchandise sales figures” included in the report are not accurate.

The news comes weeks after a report showing that TikTok had generated $10 billion in consumer spending, the first non-game mobile app to achieve that milestone.

That’s according to consumer and market data provider data.ai, which found that TikTokhad raised $3.8 billion in 2023, up from $3.3 billion in 2022. Those numbers do not include revenue from the company’s eCommerce business.

“TikTok is poised to become the highest earning mobile app ever — approaching the $15 billion milestone in 2024,” Lexi Sydow, head of insights at data.ai, said in a blog post. “Consumers are spending over $11 million per day tipping their favorite content creators, propelling TikTok past the world’s most lucrative mobile game to date: the addictive and beloved Candy Crush Saga.”

TikTok’s consumer spending here comes from TikTok coins that users spend on virtual gifts for content creators on the platform. Creators can convert those coins into fiat currency.

The company’s eCommerce ambitions are happening at a time when younger consumers are using social media platforms like TikTok as shopping destinations.

Tracking the Digital Payments Takeover: Monetizing Social Media,” a PYMNTS and Amazon Web Services research collaboration, found that 68% of Gen Z consumers searched for products on social platforms, while 22% eventually completed a purchase, the highest shopping rate on social media among all generations.

Instagram and TikTok are the go-to social networks for browsing and purchasing products. with clothing, apparel and beauty products being the most sought-after,” PYMNTS wrote last month. “Additionally, the study reveals that over 40% of this generation prefer using Instagram or TikTok over Google to explore brands, as per separate PYMNTS Intelligence research.”