TikTok is taking on Amazon with its new shopping feature to attract Gen Z consumers who love short videos and in-app purchases. However, the Chinese app’s e-commerce debut is facing some challenges from both sellers and buyers who are not impressed by its offerings.
This week, TikTok announced its Shop feature, giving it a prominent spot on the app’s search home screen. The feature allows its 150 million U.S. users to browse through products, see them in action in TikTok videos, and buy them with a few taps. The company hopes to leverage its AI-driven video platform and its popularity among young users to create a new shopping experience that rivals Amazon.
However, some e-commerce industry insiders told Fortune that TikTok Shop has some drawbacks that may deter potential partners. One of them is the low-quality of products that are mostly made in China and cost less than $20. Another is TikTok’s policies around customer data, which may limit the ability of sellers to build relationships with buyers.
TikTok Shop is also competing with other social media platforms with integrated shopping features, such as Instagram, Snapchat, and YouTube. These platforms have more established relationships with brands and influencers and may offer more variety and quality to shoppers.
TikTok’s e-commerce ambitions are part of its strategy to diversify its revenue streams and fend off regulatory threats in the U.S., where it faces a possible ban over national security concerns. The company also wants to replicate its success in Southeast Asia, where TikTok Shop is its fastest-growing feature and is expected to hit $20 billion in gross merchandise value by the end of this year.
