Chinese tech company ByteDance has postponed the launch of its shopping platform on TikTok in the United States due to concerns about the app's future and a lack of interest from merchants, The Wall Street Journal reports.
TikTok Shopping Platform Launch Held Back by US Ban Concerns
ByteDance had planned to release the platform for all sellers in early spring, but it has now been delayed until June at the earliest.
There are worries that the launch date could be pushed back even further due to merchants' concerns about a potential ban of the app, as well as weak adoption of live-streaming e-commerce in the US.
According to Coresight Research, the US livestream shopping market was worth $20 billion in 2022. Then, by 2026, it is expected to more than triple to $68 billion in sales. However, it is yet to reach the $170 billion number set by China in 2020.
Additionally, TikTok had difficulty attracting more sellers to open storefronts after a preliminary test launch with a small group of selected merchants late last year.
The second phase of expanding the test pool was delayed until late March. This setback for ByteDance could hurt the company's plans to increase revenue from its global asset, as the US market is most lucrative outside of China.
In March, TikTok reported 150 million monthly active users in the United States, compared to 100 million in 2020.
More Challenges for TikTok
ByteDance's US business faces headwinds, including rising geopolitical tensions and increasing e-commerce competition from rivals such as Shein and PDD Holdings' Temu.
ByteDance's push into online shopping is part of a drive to earn more money from its Chinese and global apps, which are popular but have yet to lift the company into profit.
The company has recorded operating losses of more than $7 billion in 2021, according to The Wall Street Journal. ByteDance has been restructuring to improve efficiency since Beijing tightened oversight of China's internet sector. It has cut around 20,000 workers since late 2021.
ByteDance Looking for More Revenue Streams
According to recent reports from ByteDance investors, the company is seeking out new sources of revenue, and they anticipate revenue growth in the high double digits this year.
A Bloomberg report tells us that although ByteDance's revenue surpassed $80 billion last year, with most of it coming from digital advertising, the growth rate slowed down to 30% from 80% in 2021.
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ByteDance heavily relies on China for more than 80% of its revenue, but the competition has stifled the growth of its flagship apps, Jinri Toutiao and Douyin.
Consequently, ByteDance invests in food delivery and location-based services to drive traffic to shops, restaurants, and hotels.
Investors are concerned that the uncertainties surrounding the future of the app in the US could have a domino effect and put other popular apps, advertising, e-commerce, and cloud-computing services at risk. TikTok remains ByteDance's primary attraction outside of China.
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