TikTok’s policy shift challenges Chinese e-commerce vendors

Chinese e-commerce vendors eyeing TikTok Shop in the US as an Amazon alternative find themselves in a tussle with the app’s tightened enforcement of rules for overseas sellers. According to industry insiders and vendors, TikTok now requires US entities to be 51% US-owned and chaired by a US passport holder, posing challenges for sellers from China who previously operated through US entities. This shift disadvantages them against US-based TikTok sellers, impacting their prominence and support on the platform.

With approximately 170 million American users, TikTok grapples with regulatory risks while aiming for rapid growth. Amid threats of bans or divestments in the US, the platform emphasises its contribution to creators and small businesses while expanding merchant partnerships. Despite criticism, TikTok asserts clear policies for all sellers, including international ones, but declines to address claims of reduced prominence for overseas sellers.

The tightening of TikTok’s rules is perceived by Chinese vendors as targeted, potentially altering their strategies on the platform. Some vendors contemplate reducing investments or seeking US partnerships to navigate the evolving landscape. In contrast, Amazon’s platform treats all sellers equally, without differentiation based on nationality, offering a level playing field for competition.

Why does it matter?

Chinese vendors, drawn by the opportunity and subsidies offered by TikTok, have rapidly embraced its shopping platform as an Amazon alternative. Despite challenges, sellers see potential in TikTok’s growing market presence. However, ongoing changes in TikTok’s policies prompt sellers like Bai to reassess their approach and explore alternative strategies to maintain competitiveness in the evolving landscape.