The early version of the social media app’s eCommerce marketplace in the U.S. showcases low-priced products from China, drawing comparisons to the challenges Amazon has faced with its marketplace and reigniting regulatory concerns, Bloomberg reported Thursday (Sept. 7).
TikTok did not immediately reply to PYMNTS’ request for comment.
Similar to Amazon, TikTok’s Shop suffers from overwhelming choices and a free-for-all marketplace, according to the Bloomberg report. The Shop option, which is prominently displayed between the For You and Following feeds, presents users with a never-ending scroll of “recommended” random products.
Product categories and sub-categories display a wide range of options, from inexpensive mini-car trash cans to more expensive computer desks and bedding sets, the report said. However, misspelled brand names and implausible prices on some listings raise concerns about potential counterfeit sales.
TikTok attempts to create a sense of urgency in its marketplace by highlighting low prices, offering coupons and promoting free shipping, per the report. It also shows the number of times a product has been sold and a countdown clock indicating the time left for a sale.
However, the lack of brand listings before clicking on a product and the use of product names seemingly tailored to search engines and algorithms raise questions about the authenticity and quality of the products, according to the report. The presence of brands that have been removed from Amazon for faking customer reviews raises further doubts about the authenticity of the products available.
A TikTok spokesperson told Bloomberg: “Even in testing, there are over 200,000 verified U.S. merchants on TikTok Shop selling legitimate products, including over 150,000 beauty products that have been validated through our process and represent some of the biggest names in the beauty business.”
In addition to concerns over product authenticity, TikTok’s ownership by its Chinese parent company ByteDance has also raised scrutiny regarding data privacy, the report said. The company has taken steps to address these concerns by isolating sensitive data from its American users and storing it in the U.S. However, with the launch of Shop, TikTok may face additional regulatory scrutiny as it collects payment information and other data from users.
It was reported in May that fears of a ban had led TikTok to delay the launch of its U.S. shopping platform. A spokesperson for ByteDance disputed the report at the time, telling PYMNTS, “So many people rely on TikTok for product discovery and recommendations, and we want to make sure we get the experience right before we fully launch.”
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