Chinese TikTok Vendors Disgruntled as US Regulations Become Stricter

28th March, 2024
Chinese TikTok Vendors Disgruntled as US Regulations Become Stricter

Chinese E-Commerce Vendors on TikTok Discontent with Tightened U.S. Rules

Chinese e-commerce vendors aiming to sell products through TikTok Shop in the U.S. as an alternative to Amazon express frustration over recent moves by the short video app to tighten enforcement of its rules for overseas sellers opening shops on the platform.

In response to threats of potential divestment or bans on its U.S. operations, Chinese-owned TikTok has taken a stricter stance in recent weeks, according to five Chinese vendors and an industry association representing 3,000 Chinese stores selling online.

TikTok now requires that U.S. entities registered by sellers be 51% U.S. owned and chaired by a U.S. passport holder, causing concern among Chinese sellers who had utilized U.S. entities to gain recognition as U.S. merchants on the platform. These sellers now face the disadvantage of being re-registered as overseas sellers, receiving less prominence and support compared to U.S. TikTok sellers.

While TikTok, with approximately 170 million American users, aims to balance growth and regulatory risks, it has intensified its rhetoric on the potential economic impact of a U.S. ban while seeking to compete with larger rivals by enrolling more merchants.

A TikTok spokesperson maintains that the company’s policies for all sellers, including international ones, remain unchanged since TikTok Shop’s introduction in the U.S. in September 2023, emphasizing the need to ensure a trustworthy shopping environment.

Feeling targeted by TikTok’s rules, some Chinese vendors are considering reducing their investment in the platform or seeking U.S. partners. In contrast, Amazon treats U.S. and other sellers equally on its platform.

Allegedly, TikTok’s tightening of rules is in response to political sensitivities in the U.S. during an election year, although TikTok declined to comment on this assertion.

Despite these challenges, Chinese vendors have rapidly expanded their presence on TikTok’s shopping platform, seeking an alternative to Amazon and benefiting from subsidies on delivery costs.

As they navigate the evolving landscape of TikTok’s policies, Chinese sellers like Jackie Bai are reassessing their strategies and exploring partnerships to remain competitive in the evolving market.