Recently, according to informed sources, ByteDance's Tuke has set its 2024 target in the US: to expand its e-commerce business tenfold to reach US$17.5 billion (S$23.3 billion). If this goal is achieved, it will pose a significant threat to e-commerce giants such as Amazon.
However, the sources also indicated that although Tuke's internal meetings discussed the goal of Tuke Shop reaching US$17.5 billion in merchandise sales in 2024, this figure may change depending on business progress.
Meanwhile, on January 3, 2024, Tuke also announced that starting in April, it will increase the fees charged to merchants for most product categories to 6% per sale, and further to 8% in July.
Tuke analyzes that this phenomenon indicates that Tuke is rapidly beginning to generate revenue from its e-commerce platform.
Currently, Tuke Shop charges a commission of 2%+30 cents per transaction, and even after the adjustment to 8% in July, it is still significantly lower than Amazon's 15% general seller fee.
For local or overseas merchants, Tuke is undoubtedly more friendly.
Tuke's 2024 target in the US not only challenges Amazon's authority in the country, but also conflicts with other Chinese companies such as Tuke and Shein, both of which also have significant influence among young American shoppers.
Unlike the two discount store competitors' models, Tuke relies on its social media influence and the appeal of "viral" videos to attract buyers.
According to Bloomberg, Tuke's global gross merchandise value in 2023 is expected to reach about US$20 billion, with most of the sales coming from its platform in Southeast Asia. However, Tuke later responded that Bloomberg's estimated US merchandise sales data was inaccurate.
It is still unclear what sales targets Tuke Shop has set globally or in other markets.
As an internet leader with a market value of over US$200 billion, ByteDance has rapidly risen to prominence thanks to the popularity of its short video platforms Tuke and Douyin. Now, the company is seeking new growth drivers beyond social media advertising, and Tuke Shop is one of its fastest-growing businesses.
ByteDance's revenue soared about 30% in 2023 to over US$110 billion, surpassing the projected growth rates of more established social media competitors Meta Platforms and Tencent.
Such achievements by ByteDance are by no means accidental.
The Tuke Shop shopping model is equivalent to combining the convenience of shopping on Amazon with the product discovery offered by apps like Meta's Instagram, allowing users to shop directly while browsing videos or live streams.
This model has already helped Douyin capture a large share of Chinese consumer spending from Alibaba Group and JD.com in China.
As Americans become increasingly accustomed to shopping on Chinese e-commerce apps, including popular fashion site Shein and Tuke under Pinduoduo Holdings, Tuke's potential in the US market should not be underestimated. Moreover, Tuke currently has about 150 million users in the US.
In the past few months, Tuke's sales growth in the US market has been significant.
Driven by Black Friday and Cyber Monday promotions in November, more than 5 million new US customers purchased goods on Tuke. This figure shows that US consumers are increasingly accepting shopping on Tuke.
In addition to the US market, ByteDance also plans to expand its e-commerce model to other regions around the world.
In Indonesia, Tuke gained control of Tokopedia's e-commerce division through a US$1.5 billion deal with the Go To Group. This allowed Tuke to relaunch its online retail services after several months of scrutiny by the Indonesian government.
With its continued expansion in global markets and a growing user base, we have reason to believe that Tuke's influence in the US and even the global e-commerce sector will continue to increase.