While TikTok's efforts to boost in-stream sales appear to be gaining some momentum, it is evident that progress is not occurring swiftly enough, prompting the platform to initiate another round of layoffs within its U.S. eCommerce division.
According to a report by Bloomberg, TikTok has commenced a third wave of layoffs in its Shop department, following the platform's inability to achieve its performance targets for 2024.
These targets must have been substantial.
TikTok has consistently emphasized that its sales in the U.S. are on the rise, with the application reporting a threefold increase in sales during Black Friday last year. For the entirety of 2024, TikTok is said to have generated approximately $30 billion in total Gross Merchandise Volume (GMV), marking a significant increase compared to 2023.
While TikTok's initiatives to enhance in-stream sales seem to be gaining traction, it is clear that the pace of progress is insufficient, leading the platform to implement yet another round of layoffs within its U.S. eCommerce division.
As reported by Bloomberg, TikTok has initiated a third wave of layoffs in its Shop department, following the platform's failure to meet its performance objectives for 2024.
These objectives must have been considerable.
TikTok has repeatedly asserted that its sales in the U.S. are increasing, with the application noting a threefold rise in sales during Black Friday last year. For the full year of 2024, TikTok is reported to have generated around $30 billion in total Gross Merchandise Volume (GMV), representing a significant rise compared to 2023.
This is the reason TikTok is eager to adopt a similar strategy, as it recognizes the significant potential if executed correctly. With hundreds of billions at stake, it is understandable why TikTok has been so proactive in promoting its in-stream shopping features, despite Western consumers showing less enthusiasm for this opportunity.
Consequently, TikTok is increasingly introducing additional in-app sales tools and broadening its Shop offerings to more regions.
Japan has recently become the latest market to gain access, marking it as the 17th region to have TikTok Shop available earlier this week. The likelihood of Japan experiencing a higher adoption rate of TikTok's in-stream shopping tools is greater, as Asian markets have generally been more receptive to such innovations. However, Western countries still appear to be cautious or less inclined to purchase products through in-stream options.
This hesitation may stem from the fact that Western consumers tend to prefer specialized functionalities across different applications. For instance, one shops on Amazon, connects with friends and family on Facebook, and views videos on TikTok. This separation reflects a more cultural perspective, whereas Asian consumers seem more willing to consolidate multiple functionalities within a single platform.
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