ByteDance-owned TikTok has paused plans to expand its e-commerce platform in major European markets, shifting its focus to growth in the U.S. amid regulatory challenges.
According to a Bloomberg report, the decision affects the planned rollouts in Spain, Germany, Italy, France, and Ireland, initially set for July, as well as in Mexico and Brazil.
The move aims to solidify ByteDance's position in the U.S., which boasts 170 million monthly users, to counter a potential ban in the region.
Concerns over the U.S. divest-or-ban law have deterred some merchants from joining the platform.
TikTok aims to tenfold its U.S. merchandise volume to $17.5 billion this year. However, an extensive European expansion could trigger regulatory scrutiny similar to that it faces in the U.S.
The TikTok Shop feature, which blends engaging video content with impulse buying, has become the app's fastest-growing segment.
The U.K. launch of TikTok Shop in 2021 faced challenges as Chinese exporters inundated the market with low-cost products, leading to mixed feedback.
Subsequently, TikTok has prioritized local A-list brands for newer market entries to improve user experience and market reception.
In the U.S., TikTok faces significant threats from regulatory actions. In May, ByteDance legally contested a mandate signed by President Joe Biden, which requires the divestiture of TikTok by January 19 or face a ban due to national security concerns.
ByteDance argues that divestiture is not feasible commercially, technologically, or legally.
TikTok has enhanced incentives to boost its U.S. e-commerce presence, lowering the entry threshold for its affiliate program from 5,000 followers to 1,000.
Affiliates can promote products in the TikTok Shop and earn commissions from sales. Meanwhile, the European Union is investigating whether TikTok Lite, a simplified version of the app available in France and Spain, might contribute to user addiction by offering monetary rewards for continued use.