David Kirton
SHENZHEN, China (Reuters) – Chinese e-commerce suppliers who want to sell products on TikTok Shop in the United States as an alternative to Amazon (NASDAQ:) are unhappy with steps they say the short video app has taken to tighten enforcement of its rules. for overseas sellers opening stores on the platform.
Chinese-owned TikTok, which faces threats of being shut down in the U.S. or banned, has taken a tougher stance in recent weeks on enforcing its internal rules, according to five Chinese suppliers on the site and an industry association representing 3,000 Chinese. stores selling goods online.
TikTok requires U.S. companies registered by sellers to be 51% U.S. owned and led by a U.S. passport holder, said the sellers and Winnie Wang, executive chairman of the Shenzhen Cross-Border E-Commerce Association, China’s largest seller group based in the manufacturing hub. .
Many Chinese sellers have used US companies to be recognized as US sellers on the platform, but rules mean they will need to re-register as overseas sellers, which they say receive less exposure and support, putting them at a disadvantage compared to American TikTok. sellers.
TikTok, which is used by about 170 million Americans, is trying to find the right balance between pursuing rapid growth and managing regulatory risks.
He is ramping up his rhetoric that the US move to ban the platform will take billions of dollars out of the pockets of creators and small businesses, while racing to catch up with larger rivals like Shane and PDD Holdings-owned Temu by signing up more merchants.
A TikTok spokesperson said the company has clear policies and requirements for all of its store sellers, including international sellers, and these have not changed since TikTok Shop was introduced in the US in September 2023.
“TikTok has strong policies to protect customers and create a trusted shopping environment, and we are constantly improving enforcement of our rules,” the spokesperson said, without commenting specifically on whether international sellers are becoming less known.
Chinese sellers said they feel targeted by TikTok’s rules, and some are considering cutting back on the resources they put into promoting sales on the platform or finding partners in the US.
“We are rethinking how much time and resources we put into this,” said Shenzhen-based e-commerce seller Jacky Bai.
He and another seller said that by comparison, Amazon doesn’t differentiate between U.S. and other sellers on its platform because everyone has access to its “seller central” and competes on a level playing field.
Amazon did not respond to a request for comment.
Bai and two other Chinese sellers said they heard from TikTok Shop officials that the tightened rules were in response to the political sensitivity TikTok faced in the U.S. during an election year. TikTok declined to comment.
U.S. officials have criticized the app’s security and privacy, suggesting user data could be shared with Beijing, but TikTok said the firm has never given or received a request to hand over U.S. user data to the Chinese government.
ALTERNATIVE TO AMAZON
Chinese merchants selling products from cosmetics to clothing to homewares have rapidly expanded their presence on the ByteDance-owned TikTok shopping platform in the months since it launched in the United States.
“Almost every consumer technology company I know based in China, and every Chinese consumer technology customer we serve, sells on TikTok, and those who don’t sell are considering how and when to start selling on TikTok,” Chris Pereira said , CEO. business consulting group Impact.
From its opening in September 2023 through the end of the year, TikTok’s U.S. store generated $1.67 billion in gross merchandise value, data provider YipitData estimates.
TikTok said it does not disclose sales data and did not respond to questions about the accuracy of YipitData’s estimates.
Sellers said they were looking for an alternative channel to dominant e-commerce giant Amazon and were also attracted by subsidies on shipping costs.
According to Wang, about 50% of sellers on Amazon’s marketplace are Chinese, most of whom are concentrated in Shenzhen.
These suppliers, usually small businesses, apply to create “digital storefronts” and pay the platforms a fee to service their accounts and advertise and deliver their products.
Bai opened a TikTok store in the U.S. in October, mainly selling lingerie, and by the end of February the platform accounted for 20% of his revenue, he said.
He didn’t want to name his business or products for fear of retaliation from the platform, but said his TikTok store flourished after he hired American actors to promote his products.
Bai said a TikTok sales representative told him this month that he would have to close his U.S. operation and re-register as an overseas seller because he is a Chinese citizen.
Bai is now rethinking his strategy and looking for local partners because he believes this will put him at a disadvantage compared to rival sellers.
“The TikTok store is so new that the internal rules change every week and they are particularly strict,” he said.