TikTok is reportedly planning to ban links to outside e-commerce websites such as Amazon, as it ramps up its shopping platform in the US.
The move is seen as a way for the company to force people to use TikTok Shop if they want to purchase an item that they see on the app, reports ‘The Information’.
According to the report, TikTok Shop is on track to lose more than $500 million in the US this year.
“TikTok Shop, the app’s nascent shopping service, is expected to lose more than $500 million in the US this year,” said the report, citing sources.
The loss reflects TikTok’s heavy investment in hiring, building a delivery network, and “subsidizing merchants that offer double-digit–percentage discounts and free shipping,” the report added.
Consumers in the US are spending around $3-$4 million a day on TikTok Shop. The company expects this figure to exceed $10 million by the end of the year.
TikTok, the short video platform owned by ByteDance, launched the online shopping service TikTok Shop in 2021, starting in Indonesia. The shopping platform has become a strong player in Southeast Asia.
Last week, e-commerce giant Sea reportedly said it will bump up investments in its online shopping business Shopee across all markets as Chinese company TikTok’s shopping venture expands into new territories.
Earlier this month, New York City banned TikTok on city-owned devices over security concerns. City employees are not permitted to download or use the app or access the TikTok website from any city-owned devices.
