TikTok’s reputation as one of the fastest-growing ecommerce platforms of all time is under considerable pressure, even if it avoids being banned in the U.S.
The Trump administration’s tariffs on Chinese goods, including closing the de minimis loophole that allowed TikTok to sell consumer goods on the cheap, is causing “significant disruption and uncertainty in the marketplace,” according to Jason Goldberg, Chief Commerce Office at Publicis Groupe, an agency holding company.
Under the de minimis exemption, packages shipped to the U.S. from other countries would not incur a tariff as long as they were less than $800. With the exemption now closed, all Chinese products will be subject to Trump’s new 10 percent tariff, and TikTok, a haven for low-priced consumer goods often manufactured in China, will be especially affected.
A recent Attain analysis shows that TikTok specializes in inexpensive goods.
The average transaction amount on TikTok Shop, the platform’s retail marketplace, was $22 in December 2024, a nearly 30 percent drop from January 2024, when the average was $31.16, and an even steeper decline from February 2024, when the average sale exceeded $37, the highpoint for the last 12 months.
This doesn’t mean TikTok’s retail business struggled, though. In fact, consumer activity increased over this time period. The average purchase frequency for TikTok buyers increased from 2.9 purchases per month in January 2024 to 3.7 this January.
The decrease in average transaction price and increase in purchase frequency suggests that TikTok users bought more, lower-priced goods over this period, and that the TikTok Shop was flooded with cheap products. Purchase activity for these kinds of goods might decrease due to the higher prices caused by tariffs.
TikTok faces an even bigger threat, an existential one, in the face of its looming ban in the U.S. The app was shut down temporarily last month due to bipartisan legislation that forced ByteDance, TikTok’s parent company, to sell its stake in the company because of security concerns. Legislators worried that ByteDance, which is based in China, was collecting information on American users and sending it to the Chinese government. The law forced ByteDance to either divest from TikTok or cease operations in the U.S. — it chose the latter.
Trump enacted a 90-day extension, allowing ByteDance more time to find a buyer, but it’s uncertain whether a sale will occur or if Trump will enforce the law if it doesn’t. This unpredictability is causing a lot of hand-wringing among retail brands, according to Goldberg.
“There is an incredible amount of brand awareness generated on TikTok,” Goldberg says. “Most big retailers have major influencer programs on TikTok, trying to get influencers to talk about Walmart products, for instance. Now we have to have a Plan B for where that product discovery and brand amplification will happen.”
Some speculate that TikTok will ultimately end up in the hands of an American-based tech giant, which doesn’t make the situation any less fraught. If a larger retailer, say Amazon or Walmart, were to purchase TikTok, it could limit the other from selling and advertising in the platform. “If you’re Walmart, you don’t want it to be Amazon. If you’re Amazon, you don’t want it to be Walmart,” Goldberg says.
Whatever the result, the fate of one of the largest, fastest-growing online retailers in existence hangs in the balance, and retail brands have no recourse but to sweat it out before a decision is made.
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