TikTok's online shopping mall, TikTok Shop, is leading the U.S. e-commerce market. However, TikTok itself faces the risk of being banned in the U.S. and is looking to the words of President-elect Donald Trump for guidance. Although Trump previously supported the expulsion of TikTok, he changed his stance during the election process to secure support from younger voters.
◇ TikTok Shop, leading U.S. e-commerce with ‘steady success’
According to reports from Business Insider and Hong Kong's South China Morning Post on the 17th, U.S. consumers spent more money on TikTok Shop than on Sephora and Shein during the last third quarter. Consumer trend analysis firms, such as Coefficient Capital and New Consumer, released reports containing this information. TikTok surpassed both U.S. and Chinese companies, securing the top position among the e-commerce platforms where U.S. consumers have made expenditures.
Launched in September last year in the U.S., TikTok Shop is TikTok's e-commerce service. Users can purchase products within the application after exposure to them in TikTok videos. TikTok Shop generated $20 billion (approximately 27 trillion won) in revenue in 2023, a figure five times higher than the 2022 revenue of $4.4 billion (5.8 trillion won).
◇ TikTok faces expulsion in the U.S.… must sell business rights by Jan. 19
However, TikTok is at risk of being expelled from the U.S. The Biden administration has argued that TikTok, closely linked to China, could pose a threat to national security. The court has also acknowledged that there could be data leaks of U.S. citizens' information or content manipulation by the Chinese government through TikTok.
Accordingly, in April, the U.S. House of Representatives passed the 'TikTok Ban Act,' forcing TikTok to sell its business rights in the U.S. by Jan. 19. The TikTok Ban Act stipulates that if ByteDance does not sell its U.S. operations, TikTok services will be suspended in the country.
On the 14th (local time), the U.S. House Select Committee on U.S.-China Strategic Competition sent a letter to the CEOs of Apple and Google, demanding that the app stores not support the TikTok app in the U.S. This means that under the TikTok Ban Act, if TikTok's parent company, ByteDance, does not sell its U.S. business rights by Jan. 19, it would be prohibited from updating or supporting downloads of the TikTok app.
◇ Trump meets with TikTok CEO “I will look into ways to help”
Industry insiders say that the only way for TikTok to survive in the U.S. is fundamentally through President-elect Trump's 'decision to repeal the law.' While Trump had been negative toward TikTok during his presidency, he declared during this election that he would 'save' TikTok to garner support from young voters.
On the 16th (local time), during a press conference at his Mar-a-Lago resort in Palm Beach, Florida, Trump mentioned, 'I have a warm spot in my heart for TikTok.' He also noted that he would look into ways to save TikTok. It is reported that Trump met with Shoou Zi Chew, TikTok's CEO, at Mar-a-Lago that afternoon.
TikTok expects that after Trump is inaugurated on Jan. 20 next year, he will nullify the TikTok Ban Act. TikTok and its Chinese parent company, ByteDance, filed a request for a temporary restraining order with the U.S. Supreme Court to buy time until just before Trump's inauguration. If the Supreme Court accepts TikTok's request, the law's effectiveness will be temporarily suspended.
The Washington Post noted, 'While President-elect Trump cannot overturn the already passed law, he can pressure Congress to repeal it or advise the attorney general not to enforce it.'