TikTok Shop Watch #4 - US, Europe and Latin America
Is e-commerce in TikTok Shop muddling along or showing real progress?
Contents
Things that caught our attention
Introduction
In January, we published three reports about the development of TikTok Shop around the world. We examined the progress in Southeast Asia, the UK, and the US, as well as TikTok’s struggles with live commerce.
There is a lot of interest in the current developments of TikTok in various markets where it recently launched, among which are several European countries. These new markets can learn a lot from what TikTok Shop has already achieved in other parts of the world. We have therefore decided to do another two-part update about TikTok Shop. The information in these two reports has primarily been sourced from expert interviews with (former) TikTok Shop team members, as well as Momentum Works' recent e-Commerce in Southeast Asia report. In the first report, we will discuss the progress outside Asia, while in the second report, we will describe the developments in Southeast Asia.
In this first report, free subscribers can read the current status of TikTok Shop in various markets around the world. Paid subscribers can read the full report and will learn:
How TikTok Shop is changing its e-commerce model and how live commerce is developing.
Details about the layoffs and management changes at TikTok Shop US.
The outlook and targets for TikTok Shop.
And more …
Become a paying subscriber to unlock the full report and support our in-depth research into key China tech trends.
The information below refers to the US market, unless stated otherwise.
Ed Sander, Tech Research Analyst
P.S. The second part of the WeChat e-commerce report will be published in August.
TikTok Shop markets around the world
USA
As we described in our reports earlier this year, TikTok Shop’s performance in the US market has not been satisfactory for Bytedance, with actual sales in the US market only reaching half of the expected target.
The US market performed poorly in 2024, with a full-year target of $15.5 billion, but only US$8.6 billion (with a commission rate of 5%) was achieved, and the subsidy rate and subsidy amount reached the highest level (see ‘Subsidies’).
In 2025, the US market GMV has declined, with average daily sales decreasing from $60 million to $50 million, and the future trend is still unclear. In contrast, Temu's daily sales peaked at $138 million and Shein's at $80 million during the same period.
The US branch of TikTok Shop faces many challenges. First, the operation of content e-commerce in the US market has encountered difficulties (see ‘Development of live commerce’), and external factors such as tariffs have had a significant impact.
By June 2025, the daily sales of TikTok's e-commerce in the United States fell further to $40 million. The reasons for the decline in sales include geopolitics, tariff policy impact, internal restructuring and uncertainty in operating rights. In particular, the cancellation of the de minimis tax exemption caused the daily sales of cross-border small package business to drop sharply from $10 million at the end of April to $2 million in the beginning of May 2025. However, by adjusting the strategy, daily sales of cross-border later rebounded to between $4.5 million and $5 million.
Second, in terms of cross-cultural management, differences in thinking and cooperation between Chinese leaders and US employees also bring some challenges (see ‘Staffing and management changes’).
In addition, middle-level managers sent from China encountered adaptability problems when applying domestic e-commerce experience to cooperation with local merchants in the United States (see ‘Development of live commerce’). TikTok has sufficient natural traffic, but the effect of traffic investment is unstable. Therefore, merchants and even brands are not very willing to invest in TikTok. [2] These factors have had a significant impact on business performance.
Europe
The European market is divided into two tiers. The United Kingdom, as a first-tier market, began operations in February 2021, and by June 2025, daily sales had reached $11 million.
NielsenIQ's revealed that TikTok Shop was the country's fastest-growing e-commerce platform and third-largest online marketplace by 2024. The report highlighted that 54% of shoppers made their first purchase on TikTok Shop in 2024, while repeat customers accounted for 72% of total sales and shopped twice as often as new users. [4]
However, growth in the UK market faces challenges, with little significant change expected from the beginning of the year to the end of the year.
In the UK, TikTok Shop has launched a program for onboarding Chinese and Hong Kong businesses. On February 19, TikTok held a matchmaking meeting for leading merchants and influencer agencies in Shenzhen, at which it announced that the UK third-party POP cross-border store would officially open on February 26. 26 first-level categories were opened for entry, including beauty and skin care products, 3C products, and household items, etc. [3] [5]
In addition, a series of measures were announced to support sellers in opening up new markets. These included ‘Quick Settlement’ (TTS’s leading cross-border self-operated merchants in the UK can open a store in the UK with ‘one click’) and commission reduction from 9% to 2% within 90 days. The commission for 3C and some Beauty products is only 5%. In addition, there are policies such as co-funded free shipping plans and subsidies for high-quality products, all of which are to give merchants more profit space and attract more brands. [5]
The second-tier markets in Europe include Germany, France, Italy and Spain. Among them, Germany's daily sales in June were $300,000, France and Italy both $150,000 each, and Spain $140,000. The development of new markets, such as the Polish market, is still in its early stages and has not yet had a significant impact on the overall performance.
But in these new markets, the response to TikTok Shop’s launch has been lukewarm…
In Germany, where TikTok Shop launched in March, it was one of the main topics during one of the leading e-commerce conferences, K5 Future Retail, in June. Some brands shared their experiences on stage, which ranged from ‘we’re selling a lot’ (by a candy brand that was already very popular on TikTok before the launch of the shop) to ‘it has done nothing’ (by a cosmetics brand that received very little traffic and sales, despite TikTok Shop’s subsidies). (For those who understand German, the video of these experiences can be viewed here and here.)
Tech Buzz China’s Ed Sander shared his personal view in part of his keynote at K5: how we should adjust our expectations because TikTok Shop will both exceed and not meet them. The concerned section of his keynote can be watched in the video below.
An often-mentioned ‘TikTok Shop livestream success story’ at K5 and in press releases is Lidl in the UK, which sold a £30 pack of protein products in their livestream for £6, which would be donated to charity. Ed commented that with lots of free traffic, a low price, and a charity, it’s no surprise it sold its 3,000 packs in 18 minutes. [7]
Adoption in Germany remains sluggish. Since its March 31 debut, just 2.5% of German consumers have purchased via TikTok Shop, despite one-third having heard of it, according to data from media agency OMD. [6]
Other markets
Regarding the expansion plan in the Latin American market, the Mexican market was launched in December 2024, and large-scale investment promotion began at the end of January 2025. By May 2025, the average daily sales in the Mexican market reached $670,000. Daily sales are expected to grow to $800,000 this year.
In Mexico, the business environment is mainly composed of Chinese investors and companies that have migrated from the United States, and 95% of the supply chain depends on China. The number of local Mexican merchants accounts for only 20%-30%, and their sales account for less than 10%.
In August, TikTok Shop Mexico will open its self-operated POP model to Chinese cross-border sellers, allowing registration with Chinese company business licenses. The platform will support sellers with localised playbooks, product guidance, commission discounts, and a subsidised shipping program. [9]
The Brazilian market (68.8 million TikTok users) was launched on May 7, 2025 and reached daily sales of about $200,000 by the end of June. In this market, TTS currently only allows local business operations and has not yet started cross-border trade. Cross-border business in South America faces significant challenges, including high tariffs (up to 50%-70% for some categories) and visa issues. These factors make it difficult for top Chinese merchants to localise operations and recruit local anchors, thus hindering the rapid expansion of business.
Furthermore, Brazil's logistics infrastructure is relatively weak, logistics costs are high, and delivery time is long. [10] Still, Banco Santander, a Spanish international bank, has released a forecast report on the development prospects of TikTok Shop e-commerce in Brazil. The report predicts that by 2028, TikTok Shop's GMV in Brazil is expected to reach 25 billion to 39 billion reais ($4.5 - $7 billion), accounting for 5% to 9% of the market share. [8]
In Brazil, merchants drive business growth by using platforms such as Meikeduo and Shopee, among which Shopee's cross-border business performs exceptionally well. Some Chinese merchants have achieved good sales results on this platform and have gradually localised their sources of goods. This strategy helps overcome market entry barriers while also laying the foundation for future growth.
The primary purpose of setting up a factory in Mexico is to enter the US market rather than focusing on the local market. In contrast, due to the particularity of the Brazilian market, no company currently builds a factory specifically for that country, but uses existing resources for localised operations.
The Middle Eastern market has developed relatively slowly due to logistics and infrastructure issues. The scale of the Middle Eastern market is not as large as that of Mexico, and the situation is more complicated. TTS admits that its understanding of the Middle Eastern market is not comprehensive. With daily sales of less than $300,000, the region has been marginalised, and further investment has been suspended.
Although TikTok has expanded into emerging markets such as Mexico, Europe, and the Middle East, global sales have not risen significantly.
The transaction amount in the above data includes orders that were later returned or cancelled. After removing the returned and cancelled orders, the total amount is about 80% of the original data.
Operating methods (managed versus open platform)
The operating methods in the United States are mainly divided into two categories: the fully managed model and the open platform model. The open platform gives third-party merchants autonomy to list goods and set prices, and the platform makes profits by charging a certain percentage of commission.
The vast majority (99%) of the managed model is fully managed, mainly through direct shipment of small cross-border packages from China. In contrast, the business volume of a semi-managed model is minimal and can be ignored. Since the cancellation of the de minimis import tax exemption, every 72 hours, the transaction volume of the fully managed model reached $6 million. In comparison, the open platform model achieved a transaction volume of $36 million.
90% of cross-border merchants in TikTok's e-commerce are from China. Since last year, the ecological involution of Douyin e-commerce in China has become increasingly severe, and it has become difficult for small and medium-sized businesses to make money. Because of this, a large number of small and medium-sized enterprises and MCN agencies have turned to TikTok e-commerce in the United States. Following this trend, TikTok’s e-commerce entry policy for merchants in the United States was also adjusted at the end of November last year. One of the most significant changes is that merchants no longer need to provide a third-party e-commerce platform experience and U.S. operating qualifications to enter TikTok's e-commerce. They can also enter by uploading business licenses from mainland China and Hong Kong. [11]
Logistics
In the Mexican and Brazilian markets, the company has adopted different logistics strategies. In Mexico, SF Express is responsible for the main transportation links, and local logistics companies complete the last-mile delivery. In Brazil, local logistics services are used throughout the process (there are no cross-border imports on TTS in Brazil).
With particular reference to the British market, TTS’s logistics distribution mainly relies on the services of Royal Mail and DHL. It used to work with Hermes, but it terminated the partnership due to its unsatisfactory performance. Local e-commerce platforms such as eBay also use similar logistics solutions, such as Royal Mail and UPS.
In terms of infrastructure services, TTS refers to the Amazon FBA model to promote the self-operation of local warehousing and logistics. At present, it adopts the certified warehouse model, with 48 certified warehouses and four official venues across the United States. In the future, TTS plans to expand the scale and gradually turn to self-operated warehouses.
In Europe, TikTok Shop has been rolling out new logistics services, including Fulfilment by TikTok (FBT) and intra-EU delivery solutions. FBT, which operates in Spain and Germany, enables local sellers to outsource fulfilment. TikTok handles storage, packing, and delivery, much like Amazon's FBA. Already active in the UK, the service supports flexible inventory storage for packages under 20kg. TikTok Shop's EU logistics offerings also aim to streamline cross-border sales by cutting customs delays and transit times. [12]
The rest of this report is available to paid subscribers.