TikTok Shop’s ‘Buy Local’ Strategy Thwarts Chinese Merchants
Chinese merchants have fueled Amazon’s marketplace. But TikTok is being much pickier about the ones it lets onto its new shopping service in the U.S., forcing some to sneak on through other methods.
Over the past six years, a Chinese startup called Tymo built a respectable online business in the U.S. selling hair dryers, curlers and straighteners, mainly on Amazon. Last year, though, it began selling its goods on the U.S. version of TikTok Shop, the viral video app’s new e-commerce platform, after TikTok recruited Tymo’s business. The difference in results was dramatic.
Last month, for example, Tymo began selling a hair curler on TikTok for $39.99—about $10 less than it had previously charged for the product on Amazon, thanks to subsidies TikTok has offered to entice sellers to join TikTok Shop. On Amazon, it had been selling between 80 and 100 of the curlers a day. On TikTok, it sold as many as 1,000 a day last month, according to Tymo co-founder Qi Miao.
As a result, Tymo expects TikTok to drive its growth this year and generate about 20% of the firm’s total revenue, which was $130 million last year, according to Qi. To keep up with the growth, the startup in January rented its second U.S. warehouse, a 10,000-square-foot space in Los Angeles. “For us, TikTok is the next engine for growth after Amazon,” Qi said. “And TikTok has the potential to be much bigger.”