LDN - Business

TikTok to launch e-commerce program to bring Chinese goods to the US - source

[July 26, 2023] By Josh Ye

(Reuters) -TikTok plans to launch a program in August to help Chinese merchants sell goods globally, and will officially roll it out first to consumers in the United States, a person familiar with the matter said.

Seeking to replicate the success shopping platforms like Shein and PDD Holdings' Temu have had in the U.S., the Chinese-owned short-video platform will provide a suite of services ranging from storage to shipping to merchants in China to help them sell in the U.S., said the person, who declined to be named because the information is not public.

The Wall Street Journal first reported TikTok's plans to launch the platform on Tuesday. TikTok is owned by ByteDance and its Chinese equivalent Douyin has a fast-growing e-commerce business in China.

The program, called "full service" by TikTok, is already being tested in markets such as Britain. TikTok is working towards an official launch in the U.S. in August but has yet to commit to an exact date, the person added.

The program has not been created only to help Chinese businesses as TikTok plans to eventually introduce it to merchants elsewhere, the person said.

But TikTok has decided to work with Chinese businesses first because China has long been the world's factory floor with well-established export rules, the person said.

TikTok did not respond to a Reuters request for comment.

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The TikTok logo is pictured outside the company's U.S. head office in Culver City, California, U.S., September 15, 2020. REUTERS/Mike Blake/File Photo

TikTok quietly launched TikTok Shop, the app's e-commerce business, in the U.S. last November. But TikTok Shop focuses on letting small to medium sized local vendors sell goods to TikTok users from their regions.

The source said local vendors would continue to be prioritized over sellers overseas even with the launch of the "full service" program.

TikTok's move to grow its ecommerce business in the U.S. comes at a time when it is facing heightened scrutiny from U.S. officials over concerns about data security. The company is fighting to prevent a ban in the country after lawmakers introduced a bill that would grant the Biden administration authority to ban apps that pose security risks.

With the full service program, merchants in China will find it easier to sell products in the U.S. as TikTok will help them in areas such as customs clearance, warehousing and logistics，the person said.

But unlike Amazon which now sells many Amazon-branded goods on its platform, TikTok does not currently plan to sell its own products, the person said.

(Reporting by Josh Ye; Additional reporting by Zaheer Kachwala; Editing by Shailesh Kuber, Brenda Goh and Mark Potter)

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