TikTok has reportedly decided to pause its plans for expanding its eCommerce business in major European markets.
The ByteDance-owned social media platform will instead focus on growing its presence in the United States, its most lucrative market, where it faces potential divestment or ban, Bloomberg reported Friday (May 31).
According to the report, TikTok’s eCommerce business, known as TikTok Shop, has been experiencing rapid growth and has become one of the app’s most popular features.
TikTok Shop distinguishes itself from competitors by combining video content with impulse buying in a visually appealing manner.
The success of TikTok Shop is based on ByteDance’s own Douyin, one of China’s largest eCommerce platforms.
TikTok had initially planned to roll out its shopping platform in Spain, Germany, Italy, France, and Ireland as early as July.
However, the company has decided to pause these expansion plans, along with its intentions to bring the Shop feature to Mexico and Brazil, the report stated.
This decision reflects ByteDance’s strategy to focus on the U.S. market to avoid a potential ban, according to the report.
ByteDance’s leadership recognizes the importance of concentrating on the U.S. market, which boasts 170 million monthly users.
By demonstrating its value to domestic merchants and consumers, TikTok aims to address concerns that have deterred some merchants from signing up for the platform.
The company has set a goal to grow its merchandise volume in the U.S. to $17.5 billion this year.
One reason behind TikTok’s decision to pause its European expansion is the potential regulatory scrutiny it may face, similar to what it has encountered in the U.S., the report noted.
The company understands that a full-scale European expansion could invite regulatory challenges, which it wants to avoid.
TikTok is currently under investigation by the European Union (EU) regarding its lighter version of the app in France and Spain, which is being scrutinized for potential addiction risks.
A TikTok spokesperson told Bloomberg that the company is “guided by demand.”
“We’ve seen the positive impact of TikTok Shop, and we’re excited to continue experimenting with this new commerce opportunity,” the spokesperson said in the report.
