On June 22nd, Gizcoupon reported that the Financial Times reported that TikTok is attempting to enter the e-commerce market through a “Project S” plan.
TikTok’s global revenue in 2022 reached $3.5 billion. It represents an almost 60% increase compared to the $2.3 billion in 2021.
“Trendy Beat” Shopping Feature Introduced to UK Users
In recent weeks, UK users have started seeing a new shopping feature called “Trendy Beat” within the TikTok app. This feature promotes popular products showcased in short videos, such as ear spoons.
Documents and insiders revealed that all the products promoted by TikTok are shipped from China. Additionally, they are sold by a Singapore-registered company that is affiliated with ByteDance.
This model resembles the way Amazon manufactures and promotes goods. It signifies a significant shift in TikTok’s existing shopping market. In essence, it allows other vendors to sell products through TikTok Shop while collecting a small commission.
TikTok stated that they are currently testing this feature. Moreover, they said, “We have been exploring new ways to enhance the community experience. However, we are in the early stages of experimenting with new shopping features.”
Six sources familiar with the matter disclosed that this initiative is internally referred to as “Project S.” They added that ByteDance is establishing an online retail division to challenge platforms like Shein and Temu.
Read more: TikTok Announces That It Will Invest Billions of Dollars in Southeast Asia
According to two employees, Project S is led by Bob Kang, ByteDance’s head of e-commerce, who recently arrived from Shanghai to coordinate TikTok’s London office. Furthermore, TikTok stated that Kang is in the UK for multiple reasons. He should report to the CEO of the app, Shou Zi Chew.
Insiders revealed that Project S aims to leverage TikTok’s insights into trending products to enable ByteDance to acquire or manufacture these products themselves. The company is said to heavily promote Trendy Beat products on TikTok, hoping to surpass its competitors.
TikTok also stated that the brand uses its supplier network to produce Trendy Beat products. Two employees mentioned that ByteDance had recruited employees from Shein to drive its e-commerce business.
TikTok Plans to Expand Global E-Commerce Business
Earlier reports indicated that TikTok plans to expand its global e-commerce business by more than four times this year, targeting over $20 billion in merchandise sales. This growth primarily relies on the rapid expansion in Southeast Asia.
In 2022, TikTok Shop entered Southeast Asian countries, including Singapore, Malaysia, Indonesia, the Philippines, Vietnam, and Thailand, gaining considerable traction in local markets. Data shows that in 2022, TikTok Shop’s Gross Merchandise Value (GMV) in Southeast Asia reached $4.4 billion, more than four times the growth from 2021.
