TikTok is trying to enter the online shopping market with its “Project S” plan, according to the Financial Times.
TikTok’s global revenue in 2022 will be $3.5 billion (currently about 25.13 RMB billion), up nearly 60% from $2.3 billion in 2021.
In recent weeks, British users have started to see a new shopping feature in the TikTok app called “Trendy Beat,” which promotes some of the items popular in short videos, such as ear spoons.
According to documents and people familiar with the matter, all the items promoted by TikTok are shipped from China and sold by a Singapore-registered company that is part of ByteBeat.
This model, similar to how Amazon makes and promotes its goods, represents a dramatic shift from TikTok’s existing shopping marketplace. Simply put: other vendors are allowed to sell items through the TikTok Shop and then receive a small commission.
TikTok says it is currently testing the feature. The company said, “We’re always exploring new ways to enhance the community experience, and we’re in the early stages of experimenting with new shopping features.”
Six people familiar with the internal situation said the plan is known internally as “Project S.” They added that Bytespring is building an online retail division to challenge platforms such as Shein and Temu, the overseas shopping arm of Jindo.
Project S is being led by Bob Kang, ByteTok’s head of e-commerce, who recently travelled from Shanghai to coordinate TikTok’s London office, according to the two employees, who said Kang is in the U.K. for a variety of reasons and reports to the app’s CEO, Shou Zi Chew.
Project S is designed to leverage TikTok’s knowledge of current hot commodities and allow ByteTok to acquire or manufacture them itself, people familiar with the matter said. The company is heavily promoting Trendy Beat products on TikTok in hopes of outperforming its competitors, the sources said.
TikTok, for its part, said the brand uses a network of suppliers to produce products for its Trendy Beat products. To boost its e-commerce business, ByteTok has recruited staff from Shein, two employees said.
The news comes as TikTok plans to more than quadruple the size of its global e-commerce business this year, reaching $20 billion in merchandise sales, largely on the back of rapid growth in Southeast Asia.
In 2022, TikTok Shop entered Singapore, Malaysia, Indonesia, the Philippines, Vietnam, Thailand and other Southeast Asian countries one after another, making a name for itself in the local market. Data shows that TikTok Shop’s GMV in Southeast Asia reached $4.4 billion in 2022 (currently about RMB 31.592 billion), an increase of more than four times from 2021.
