TikTok Shop, the e-commerce feature of the Bytedance-owned social media platform, outperformed its competitors in the U.S. just prior to President Donald Trump’s disruptive trade policies. Launched in 2023, the in-app shopping experience for the popular video app continued to eclipse Shein and PDD Holding’s Temu in January, as per data from Bloomberg Second Measure, which analyzes credit and debit card transactions. This trend builds on TikTok Shop’s impressive sales growth throughout 2024
. During January, TikTok Shop experienced a remarkable sales increase of 153%, compared to Shein’s 26% and Temu’s 28%, according to a research note from Joe Hung at BSM.
Furthermore, the data indicates that TikTok Shop has been capturing a larger share of the market from Shein than from Temu. Its share of transactions exceeding $25—typically associated with Shein—rose by 16 percentage points in January compared to the previous year, while its share in the under $25 category, which is Temu’s primary market segment, grew by only 7 percentage points, according to Hung’s analysis. There has also been a noticeable shift of customers moving from Shein to TikTok Shop over the past year.
Despite TikTok Shop’s rapid expansion, the app’s future in the U.S. remains uncertain due to the ongoing threat of a ban if it doesn’t divest its U.S. operations. With 170 million active monthly users, TikTok is also grappling with uncertainties surrounding Trump’s 10% tariffs on Chinese exports and possible taxation on low-value parcels. Currently, packages from China valued at under $800 are exempt from customs duties under the “de minimis” rule, which applies to many of the deliveries made by Shein, Temu, and TikTok Shop to U.S. consumers. This situation has prompted Shein and Temu to intensify their efforts to adapt to the potential elimination of this small-parcel duty waiver.
If TikTok Shop continues to erode Shein’s market share, it could present additional challenges for the fast-fashion retailer, which is already under pressure to lower its valuation to around $30 billion in anticipation of a possible initial public offering in London, as reported by Bloomberg News citing sources familiar with the situation.
