The app hopes to replicate the success of China’s Douyin, which racked up $ 26 billion in e-commerce transactions in its first year.
ByteDance’s TikTok is working with brands, such as streetwear brand Hype, to test in-app sales in Europe. An initiative that will intensify its competition with Facebook and further blur the line between social media and online shopping.
The popular video app hopes to replicate overseas the success of China’s Douyin, which racked up $ 26 billion in e-commerce transactions in its first year of operation alone.
TikTok has started working with merchants in markets like the UK on ways to sell products directly to millions of users within the app, people familiar with the matter say.
While TikTok has run promotional shopping campaigns in the past, the current trials are a precursor to a broader launch of a global e-commerce service.
The prototype so far is only visible to selected participants and it is still unknown when the company will begin the formal launch. A representative for Hype confirmed the test without further comment. The brand’s showcase on its TikTok account shows a series of products with images and prices, according to a screenshot provided to Bloomberg News.
ByteDance is strongly moving toward a $ 1.7 trillion Chinese e-commerce market in hopes of adding another mega-growth story ahead of a highly anticipated IPO. Its goal is to handle more than $ 185 billion in e-commerce annually by 2022, leveraging the reach of TikTok and Douyin.
Unlike Chinese rivals Alibaba Group Holding Ltd. or Tencent Holdings Ltd., ByteDance’s apps enjoy a broad global fan base and its co-founder Zhang Yiming wants to use that as a stepping stone into the online trading game.
“TikTok has been testing and learning with ecommerce offerings and partnerships, and we are constantly exploring new ways to add value. We will provide updates as we explore these important avenues for our community of users, creators and brands, ”the company said in an emailed statement.
TikTok had already started testing the waters in online shopping through promotional deals with WalMart Inc. and Canadian e-commerce firm Shopify Inc.
Businesses generally tag their products on TikTok social content, with links directing shoppers to their own sites, but users technically remain on the TikTok app. Facebook and Instagram allow merchants to set up their in-app storefronts or channel users to third-party services.
Now TikTok aims to keep users within its ecosystem. Brands like Hype will operate dedicated stores on the video platform, taking orders and interacting directly with shoppers. While the Chinese company won’t handle the sales or merchandise itself, it hopes to sell more ads to merchants, increase traffic, and get a share of the transactions.
