• US sales on TikTok Shop are slumping, company employees told BI.
• The drop-off stems in part from fewer sales from foreign sellers in the wake of new US tariffs, they said.
• Temu, Shein, and other e-commerce firms are also scrambling to adjust to US tariffs on China.

Trump's tariffs are taking a toll on TikTok.

The company's e-commerce business, TikTok Shop, is off to a slow start in the US this year, four staffers who work on its shopping product told Business Insider.

The employees described declines in daily US sales from foreign sellers that contributed to an overall sales drop-off beginning in late March.

During several days in early May, TikTok Shop's daily US sales from foreign sellers were down roughly 20% to 25% month-over-month, two of the staffers said. Many of TikTok's foreign sellers are based in China, where tariffs on some products crossed 145% in April.

Internal data viewed by BI also showed daily US sales, measured in gross merchandise volume, climbed in March before falling later that month ahead of tariff announcements. The company had expected steady GMV growth this year, similar to what it saw in 2024, one of the staffers said. Sales were still up year over year in 2025.

The staffers attributed the drop-off to tariffs, which have created cost headaches for merchants, as well as broader challenges onboarding new sellers.

TikTok has faced multiple setbacks in the US this year, including a brief shutdown and app store ban after owner ByteDance failed to divest from the app.

TikTok Shop is a major business priority at the company, which also makes money from advertising and in-app payments. E-commerce drives hundreds of billions in annual sales on TikTok's Chinese sister app, Douyin. But progress in the US hasn't met leadership's expectations. The US e-commerce business failed to meet many of its performance goals in 2024. The company has recently shaken up the team's leadership structure, elevating managers with experience working on Douyin to run different departments.

A TikTok spokesperson declined to comment.

Sellers are worried about hiking prices

Amid broader economic uncertainty, the number of new sellers onboarding to TikTok Shop in the US is falling this year, two of the employees said.

It's also become much harder for Shop sellers to plan pricing and logistics as tariff costs shift.

"Sellers are hesitant to ship to their US warehouses because they don't know what they can sell," one of the employees said. "If their prices are more than twice as expensive as before, they might not be competitive versus others who still have US inventory."

Chinese goods, key for TikTok's global e-commerce business, have become much more expensive to source. Tariffs on Chinese goods in April hit 145% for items like toys, but have since been pulled back to 30% for a 90-day window as the US and China continue negotiating. The Trump administration also removed the de minimis exemption that let some merchants avoid tariffs on small shipments.

In early April, TikTok sent a memo to sellers with information on the tariff policy shifts, stating it was actively monitoring the changes.

Tariffs are squeezing both Chinese and US companies

It's not just Chinese Shop sellers that are struggling with tariffs.

US-based companies that rely on Chinese manufacturing are also feeling the effects.

Wyze, a company based in the Seattle area that makes security cameras and smart home appliances and has sold around 750,000 items on TikTok Shop, wrote in late April that it had paid around $255,000 in tariffs on a $167,000 shipment of floodlights from China.

The company did not respond to a request for comment.

Toys are also taking a hit. While some toy merchants are looking for new suppliers outside China, that can be difficult. For example, companies that sell plushies told BI in April that they are particularly dependent on Chinese manufacturing for making the soft toys.

Some of the big TikTok Shop sellers are eating tariff costs, but not all merchants can afford it, one of the TikTok staffers told BI.

"Where it's really hurting is small businesses who get component parts from China," they said.

And other e-commerce platforms, like Shein and Temu, which built businesses tied to the de minimis loophole that avoided tariffs altogether, are scrambling to adjust their strategies.

A wild year for TikTok

TikTok's bumpy start to 2025 comes at a moment of tension for the company's US e-commerce business.

The company has undergone a string of restructurings in the past year that have given greater control of the business to ByteDance leaders from China. In April, US operations head Nico Le Bourgeois was pulled under e-commerce executive Mu Qing, a manager who previously worked on Douyin. That month, the company also restructured its global governance and experience team, putting more control in the hands of Chinese and Singaporean leaders as it rolled out Shop in new markets like Mexico and Brazil.

TikTok's US future is in limbo due to a divest-or-ban law that requires ByteDance to separate itself from its US assets.

TikTok has until June 19 to find a new ownership structure. However, Trump has indicated that he could extend that deadline. He has said he has a warm spot in his heart for TikTok.

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• TikTok is restructuring a division of its global e-commerce team, a company memo said.
• The changes affect its governance and experience team, which recently laid off US staff.
• The reorg gives executives from China and Singapore greater oversight of markets like Latin America.

TikTok is shaking up its e-commerce operations in a move that gives more power to leaders from China and Singapore.

The changes affect its global governance and experience team and will shape the development of new markets such as Latin America, said a memo sent Friday to staff, which Business Insider viewed.

Global leaders, not local managers, will now oversee tasks like moderation and partner management, said the memo, sent by Yue Chen, the head of global moderation.

The move arrives as TikTok is expanding into Brazil.

"It's fascinating that they're trying to set up a country/region with leadership that's not local," one TikTok staffer said of the Latin America reorganization.

The reorg comes alongside a round of layoffs in the US's governance and experience team. The group handles tasks like protecting intellectual property, managing seller compliance, and guarding marketplace safety for TikTok Shop users and creators.

It also follows a series of changes within TikTok's US e-commerce team, which has been facing growing pressure from top leaders who've expressed displeasure with the company's 2024 performance in the country.

TikTok began expanding in Latin America — a key region for e-commerce growth — in February with a launch in Mexico. It's beginning to roll out the product to partners in Brazil this month, with plans to start serving e-commerce videos to users in May, two people familiar with the matter said.

As with the US, the company recruited talent with local expertise to help launch in the region. But in the wake of the governance and experience reorg, that team will largely be overseen by global leaders, the memo said. Lin Lin, the Singapore-based global moderation services executive, is now set to focus on the Latin America business, for example. Jiechen Zhao, a China-based executive who worked on governance for TikTok's global selling team, is set to oversee the governance and experience team's partner management and global selling moderation. Sonny Chen, another global executive based in China, is set to head up moderation enablement.

TikTok did not respond to requests for comment.

TikTok is pushing into Latin America amid US political uncertainty

The restructuring arrives as a moment of transition for TikTok's broader e-commerce team in the Americas.

Company insiders previously told BI that Chinese leaders had been tightening their grip over the US business after a string of departures from local managers, including Sandie Hawkins, TikTok's former general manager of US e-commerce, and Mary Hubbard, the company's former head of governance and experience in the Americas.

This month's restructuring shows the company may be following a similar pattern as it enters new regions, two company employees told BI.

The shifts in oversight of the business may stem from a sense among the leadership at TikTok's parent company, ByteDance, that Shop is not performing up to snuff in the Americas. Bob Kang, the head of e-commerce at TikTok and ByteDance, told staff on a February all-hands call that the US team had not met its targets in 2024. The company doled out low scores to the country's e-commerce workers in March performance reviews, which led to performance-improvement plans and exits.

The future of TikTok in the US is uncertain because of a 2024 law that requires ByteDance to divest from its US app. The company said it'd had discussions with the US government around a political resolution. A prospective deal is caught up in a wider US-China trade war.

Latin America presents a big growth opportunity for the company if it can successfully get its e-commerce business off the ground there. E-commerce spending in the region could cross $250 billion by 2028, driven largely by consumer sales in Mexico and Brazil, EMARKETER forecast in September.

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• Gen Z collage app Landing has rebranded to Zeen.
• Zeen is targeting fashion and lifestyle creators with tools for making shoppable content.
• Here's why the startup is pivoting from being a social media platform to being a creator tool.

Landing, a social collaging app that became a favorite among Gen Z users, is making a pivot.

The startup is rebranding to Zeen and targeting content creators as its core user base. Zeen is offering these creators the ability to make shoppable collages.

"We kept seeing this behavior of people wanting to shop from each other's collages, and fashion was always the biggest vertical on Landing," Zeen cofounder Miri Buckland told Business Insider.

Like any social media platform these days — just take a glance at any TikTok or Instagram post that includes an outfit — Buckland said the comment sections on Landing posts were flooded with questions like "Where did you get that dress?"

While some people (myself included) used Landing to create digital collages without clothing or products, Buckland said the overwhelming use case was outfit planning and fashion mood boarding.

Zeen, the startup's new product, is doubling down on this.

The web-only tool lets users design collages by dropping in online shopping links or uploading images. Creators can also include affiliate marketing links, like from ShopMy or LTK. Then, creators can save an image or a video of the collage to share on platforms like Substack, Instagram, and TikTok.

"What we're building with Zeen is very strictly a tool and a utility," Zeen cofounder Ellie Buckingham said. "We're not building a full social platform."

Pivoting is par for the course for startups — and it's not Zeen's first time doing so. The startup originally focused on interior design with Landing before expanding into broader categories like vision boards or fandom art. Zeen shut down Landing in September.

The startup has money in the bank to back its pivot, too.

Last year, Zeen secured another $2.3 million in funding led by venture capital firm Stellation Capital, bringing the startup's total funding to date to $9 million, Buckland told BI.

Building for the creator economy

Creators often have a robust stack of creative tools they use to make content. If they're video creators, maybe that's editing tools like CapCut. For others, it could be Canva, Adobe, or photo-editing tools like VSCO.

Zeen wants to be part of creators' tech stacks for making visual, shoppable content.

Several of Zeen's early users are Substack newsletter creators, particularly in the fashion and lifestyle category. For instance, Erika Veurink, who writes a fashion Substack called "Long Live" with 28,000 subscribers, has used Zeen for in-newsletter collages of furniture and clothing. Veurink is an advisor to Zeen.

Aditi Shah, a Peleton instructor and creator, has also been using Zeen on her Substack "Work in Progress" to showcase her favorite beauty products of the month.

With Zeen, newsletter creators can earn money if they use affiliate links. When uploading affiliate links into a Zeen collage, the platform will generate a list of the products and links for creators to copy and paste into their newsletters.

Zeen's premium tier ($6 per month) lets creators bulk-upload products from their ShopMy Collections, and unlocks unlimited use of tools like one that removes the background of product images and watermarks.

While many of Zeen's early adopters are Substackers, the startup is "platform agnostic" and aimed at creators using any newsletter tool (such as Beehiiv) or social platform (like Instagram and TikTok). Creators can export collages to fit Instagram stories and export video versions of the collage for vertical video feeds.

"The idea is, can we take what our creators are really good at, which is this curation and merchandising of products, and then automatically give them something that allows them to have a content type that competes on a video-first platform," Buckingham said.

• TikTok and AI are changing how we shop.
• Rodeo, a social commerce startup, says it wants to help people "shop the way they scroll."
• Read the 11-page pitch deck that secured the startup a spot in an Andreessen Horowitz accelerator.

Startups have been racing to crack social shopping.

Lindsay Perper, a New York-based startup founder who spent seven years working at Ralph Lauren, is entering the fray with Rodeo.

Perper founded Rodeo in 2022 and launched its mobile social shopping app in 2024. The app's vertical feed feels familiar to any TikTok user, and that's by design.

Perper told Business Insider she wants Rodeo to become the "destination for the next-gen to shop the way they scroll."

On Rodeo, users scroll through photos and videos, each with products and shopping links layered over the content. Rodeo users can also sync their Instagram and TikTok accounts to auto-post content to the app.

Perper said the app uses software like AWS Rekognition and Google's Vision AI to identify shoppable items in users' content. (If the AI is wrong, Rodeo also lets users manually enter information for products.)

Identifying products is the primary application of AI right now on the app, but Perper said personalization — a buzzword for many commerce startups right now — will come later in the road map.

Perper compares Rodeo more to Spotify than any other commerce platform. Rodeo wants to apply machine learning to shopping in the way Spotify's Discovery Weekly playlist and other tools help identify the vibe of music or artists you like.

With the rise of TikTok Shop, social commerce startups have had newfound attention from users and investors. Live shopping app Whatnot announced a $265 million Series E funding round in January and said it had crossed $3 billion in livestream sales for 2024. ShopMy, an affiliate marketing startup, announced a $77.5 million Series B in January. And last month, creator shopping app LTK overhauled its mobile app to include more discovery and social features.

A few weeks ago, Perper began an intensive startup accelerator program hosted by the venture capital firm Andreessen Horowitz. The program, Talent x Opportunity Initiative (TxO), is run by A16z partner Kofi Ampadu and mentors founders who are "building cultural breakthroughs," according to A16z's website. The TxO fund writes checks of $175,000 for founders in the program (this most recent cohort includes five startups).

Since launching, Perper told BI that Rodeo has raised $950,000 from family and friends. She also said Rodeo is targeting to raise another $2.5 million coming out of the accelerator, which will allow the startup to expand its team, build out more AI tools, and ink creator partnerships to fuel user growth.

Read the 11-page pitch deck Perper used to get into A16z's TxO accelerator program.

Note: Some slides have been edited and details have been redacted so that the deck could be shared publicly.

Rodeo pitches itself as 'the mall of the digital age' in its deck.

Here's what the slide says:

The Mall of the Digital Age

A centralized destination streamlining discovery through checkout for the next generation shopper

The deck starts out by describing the landscape of online shopping.

Here's what the slide says:

The way we shop online is evolving, but the platforms we use have not.

Tiktok wasn't built for shopping. Amazon wasn't built for discovery.

& Gen Z doesn't search, they scroll.

90% of gen z discover products on social media

78% of mobile shoppers never complete checkout

Rodeo says the online shopping industry is 'broken' and outlines a problem it wants to solve.

Here's what the slide says:

The $1.2 trillion online shopping industry is broken

Shoppers struggle to discover & purchase products they actually want leading to:

• Low conversion
• Abandoned
• No organic rates carts discoverability

It compares itself to Spotify, instead of other commerce apps.

Here's what the slide says:

Rodeo: The Spotify of Shopping

Rodeo aggregates the entire shopping journey from discovery to check out and personalizes it to the user, as the destination shoppers turn to with high purchase intent, looking for peer-recommendations and .

Mobile First Experience

• Higher conversion rates
• Fewer Organic
• Abandoned discovery Carts

Then, the deck dives into Rodeo's product.

Here's what the slide says:

Rodeo Drive for the Digital Age

Rodeo makes shopping seamless, authentic, and discovery based, all powered by user generated content

One Platform, Seamless Discovery

• A curated, AI-driven shopping hub—like an online mall.

Effortless Shopping Meets Social

• Discover, save, and buy products without leaving the platform.

AI-Powered Curation

• Personalized recommendations, just like Spotify for shopping.

Creator-Led Commerce

• Trusted tastemakers make shopping inspiring, not overwhelming.

It also includes imagery to show how the app works.

Here's what the slide says:

Style, Meet Algorithm

Recency-Weighted Scoring

• Fresh content gets prioritized for real-time discovery.

Engagement Optimization

• Posts rank higher based on clicks, views, and interactions.

Smart Resurfacing

• Viral content stays visible longer, maximizing reach.

It then breaks down how the app will fuel connection, spurring growth.

Here's what the slide says:

More Than An App: Community-Driven Connection

By fostering an inclusive supportive community, we see higher retention rates and an emotional attachment that keeps users coming back, creating an organic cycle of expansion.

Rodeo also breaks down key growth metrics, which have been redacted.

Here's what the slide says:

Attention + Intention= Successful Commerce

Rodeo's commerce-centric approach differentiates us from social platforms. Our experiential destination provides more than just commerce-enablement to shoppers, attracting high-value shoppers.

It also outlines the 'why now?' for a new app in social shopping.

Here's what the slide says:

The Perfect Convergence: Tech, Culture, and Behavior Aligning for Industry Disruption

Behavioural shift

• A behavioral shift from search to scroll and a clear, massive gap between inspiration and checkout

Technological advances

• At the same time, advancements in AI now allow us to hyper-personalize the shopping experience—curating recommendations with greater accuracy than ever before

Cultural shift

• And with privacy legislation continuing to erode cross-platform tracking, it's becoming even more difficult for brands to reach these consumers where they shop.

The deck then introduces Rodeo's founder and team.

Here's what the slide says:

We

We know commerce.

We know creators.

We're building the future.

The deck ends with a QR code.

• LTK is relaunching its app on Thursday to add new social features and expand beyond shopping.
• Other social-commerce apps like Flip have similarly moved into general entertainment.
• The companies are stepping up efforts to blend entertainment and shopping as they chase users.

For social-shopping apps, commerce alone isn't cutting it.

LTK, a platform that lets users buy products from creator videos and posts, is relaunching its app on Thursday to encourage more everyday content from its users.

"We're moving from being a shopping app to really being a lifestyle app," Amber Venz Box, cofounder of LTK, told Business Insider.

LTK's new feed lets users discover videos by geography and topic, such as fashion, parenting, cooking, and travel. It still wants creators to tag items in videos (that's how the company and its affiliate partners make money), but it hopes they'll vlog about other parts of their lives without any intent to push products.

The app also plans to roll out more strictly social features, like the ability to connect with friends.

It's not the only commerce platform looking to broaden its appeal in recent months. Flip, a TikTok-like app once composed purely of videos tagged with products, opened up to other content in July. It now hosts everyday videos it calls clips, which run the gamut from movie scenes to creator-on-the-street interviews and other types of content that would live on a general entertainment platform.

"The idea of social commerce over the last five years was that everyone built it to be a commerce platform where there's somebody selling you the product," Flip's CEO Noor Agha told BI.

Agha said Flip's clips feature is part of a push to merge entertainment and commerce. "If we cannot solve both, social commerce will never actually go mainstream," Agha said.

The opportunity is huge for companies in the category that can build an audience, as platforms like TikTok have shown. In a December EMARKETER forecast, the research firm predicted the number of US social-commerce buyers would hit 100 million in 2024, with sales crossing $100 billion in 2026. Social-shopping startups like Whatnot and ShopMy have pulled in tens of millions of dollars in new funding in the past few months as they chase new users.

TikTok made entertainment a must-have in social shopping

The push among shopping apps to add general entertainment is likely a response to the rise of TikTok's e-commerce platform, Shop. The app built an audience of more than a billion users globally through social entertainment before introducing commerce features.

"A lot of the social-shopping apps are trying to reverse engineer that entertainment component into their apps to make them more sticky and to keep users and audiences coming back," said Sky Canaves, a principal analyst at EMARKETER covering retail and e-commerce.

Social platforms in the US have spent years testing features to get users to buy stuff in-app, with mixed results. TikTok finally showed that consumers, if prodded enough, would get on board.

Canaves said TikTok has shown that social commerce can work, "but it needs to be grounded in content, and typically that's entertainment content and creator content."

Ultimately, that reverse engineering feat may be tough to pull off. In February, Amazon nixed its TikTok-like shopping feed, Inspire, in another sign that shopping-only video feeds lack staying power.

But relying on platforms like TikTok or Instagram for distribution is also risky for startups that don't want to be subject to the whims of Big Tech. Instagram, for example, has pulled back on commerce features in recent years.

LTK recently partnered with TikTok to integrate affiliate links within the TikTok app. But TikTok generally keeps its e-commerce features in-house. The company's future in the US is also uncertain due to a divest-or-ban law that targets the company and its owner ByteDance.

For social-shopping startups, building an entertainment platform where they can control everything may be the best path forward.

Putting social in social commerce

Making shopping feel more social is key to retaining users and growing an app's audience. Venz Box said a big part of that is tapping into the relationships users have with brands and the creators themselves.

LTK is encouraging creators to post more lifestyle content to the app so that users feel as connected to the creator on LTK as they do on larger platforms like TikTok or Instagram.

"We started investing in order to be the place that they retain, nurture, and grow their community," Venz Box said.

Community is a buzzword for social apps overall and has driven several trends in social shopping. Substack has several shopping-focused newsletters with established online and IRL communities. Meanwhile, TYB, a shopping-rewards platform cofounded by apparel brand Outdoor Voices' Ty Haney, is focused on building and maintaining communities of superfans with challenges and group chats.

Ultimately, every app is fighting for a share of the internet's most valuable commodity: consumers' time.

"I am willing to sacrifice that not every piece of content has something to buy in it because the opportunity set is so much larger if you can go deeper with people," Venz Box said.

• Investors are opening their wallets to social-shopping startups as TikTok's US future sits in limbo.
• Companies like Whatnot and ShopMy have raised rounds in the tens of millions of dollars.
• Upstarts are also making acquisitions and launching creator funds to capitalize on the moment.

The moment is ripe for social-commerce startups in the US.

Investors are betting big on platforms like Whatnot and ShopMy. In January, Whatnot said it closed a $265 million fundraising round after crossing $3 billion in livestream sales in 2024. ShopMy also said it closed a new round worth $77.5 million after reaching profitability.

"The timing of this raise aligns with a fundamental shift we're seeing in the market — creator marketing is evolving from an experimental channel into a core performance driver for brands," ShopMy's CEO Harry Rein told Business Insider.

Part of the category's momentum stems from TikTok. Over the past year, the company helped popularize livestream selling and connect thousands of merchants with influencers via its e-commerce tool, Shop.

But the app's US future is uncertain. It's disappeared from app stores and faces other fallout from a divest-or-ban law that requires its Chinese owner to separate from its US assets. Some e-commerce partners are testing alternative platforms to diversify where they sell.

Outside ShopMy and Whatnot, apps like Flip are gaining steam this month. Flip, a TikTok-like app focused on user-generated product reviews, recently landed in the top 10 in Apple's app-store rankings. Flip could benefit from a TikTok ban if the company fails to find a path forward by an April deadline set by President Donald Trump.

"If the TikTok ban does move forward, these platforms have a huge opportunity," said Ollie Forsyth, a former senior manager at investment firm Antler who now writes the newsletter New Economies. "Not only can they acquire huge volumes of creators, they can also acquire a huge number of new consumer users."

How social-commerce startups are seizing the moment

On top of investors pouring cash into social-commerce startups, startups themselves are spending now to capitalize on a moment of flux in the US market.

Flip pledged to offer equity grants to creators, for example, to encourage them to engage more on the platform.

Attracting new users in large numbers will be key to filling the TikTok void if a ban were to go into effect, said Matt Nichols, a partner at Commerce Ventures.

TikTok Shop succeeded because it had a unique combination of a large user base and an algorithm that could match those users with products they were likely to buy, Nichols said.

"Twenty years ago, retailers dictated what consumers purchased, and there was a long sales cycle," Nichols said. These days, there are "more quickly changing demand trends based on influencers, which has worked really well for TikTok Shop, but also hyper-fast retailers like Shein."

As an investor, he sees the best opportunities in startups working to help retailers and influencers succeed on other platforms that already have similarly big user bases, like Instagram and YouTube.

Former TikTok e-commerce leader Sandie Hawkins said in a recent interview with BI that the shopping experience TikTok made popular is likely to be imitated elsewhere.

She said social shopping creates a "community environment" where friends tell you what they think you should buy. "You're taking those recommendations right there, and you're closing the loop instead of having to send them to go someplace else," she said.

Here's a breakdown of some of the big deals announced in January in the social-commerce category:

• Livestream shopping app Whatnot closed a $265 million Series E round at a roughly $5 billion valuation. DST Global, Avra Capital, and Greycroft led the round, with participation from Andreessen Horowitz, Lightspeed Venture Partners, and Durable Capital Partners, among others.

  Whatnot's CEO Grant LaFontaine told BI the company planned to use its new funding to scale marketing, product, and engineering and expand into new markets like Australia.

• Gloss Ventures, an investment company focused on launching creator brands through social commerce and other channels, raised $15 million from private-equity firm Peterson Partners.

  Gloss Ventures' cofounder Quinn Roukema told BI the new funds would support its marketing efforts and plans to expand retail sales globally.

• Creator-affiliate platform ShopMy raised a $77.5 million Series B round led by Bessemer Venture Partners and Bain Capital Ventures. Menlo Ventures participated, as did previous investors Inspired Capital and AlleyCorp.

  Rein, ShopMy's CEO, told BI the company planned to use its funds to expand into new categories like hospitality and health and wellness, as well as to scale its performance marketing tech with new data analytics and measurement features.

• Influencer-marketing firm Later announced a $250 million acquisition of affiliate company Mavely. The deal was funded with a strategic investment from growth equity investor Summit Partners. CEO Scott Sutton told BI the purchase aimed to help Later offer clients a fuller picture of their marketing spend.
  
  He said Mavely has 120,000 creators driving sales of over $1 billion in merchandise value.
  
  "All of that data and all of that ability to track what's happening in the creator economy helps us to make money for creators, helps consumers discover the right types of products, and helps us deploy ad dollars for marketers in a really seamless way," Sutton said.

• TikTok may soon go dark in the US due to a divest-or-ban law.
• Merchants that rely on its e-commerce tool, Shop, are scrambling to come up with contingency plans.
• Some are halting warehouse shipments and testing out other apps like Flip and Instagram Live.

The clock is ticking on a potential TikTok ban in the US, and panic is beginning to set in for the platform's sellers and their e-commerce partners.

TikTok Shop, the app's shopping product, has been flourishing in the US. Last year, merchants pulled in millions in sales a month on the platform, including $100 million on Black Friday alone.

But that could all go away in a few days. Without court or presidential intervention, TikTok said it would "go dark" after January 19 to comply with a divest-or-ban law. The company has asked the Supreme Court to push back that deadline. Legal analysts say the odds aren't in TikTok's favor.

Some e-commerce players are already backing off from the app.

A TikTok Shop agency partner executive told Business Insider that a lot of merchants have paused their TikTok Shop plans while they wait to see what happens at the Supreme Court. Some have halted sending free samples to TikTok creators, while others are holding off on shipping products to US warehouses amid the uncertainty. The executive requested anonymity to protect business relationships. Some merchants are even asking for carveouts in contracts with the firm to account for the possibility that TikTok could go dark, the executive said.

Two agency sources told BI that the TikTok Shop team has not communicated anything to them about a possible US app shutdown, acting as if things are business as usual.

A TikTok spokesperson did not provide comment by the time of publication.

Other sellers are testing out alternative social-commerce platforms, such as Flip, Instagram Live, Amazon Live, and YouTube Shopping. And some US merchants are exploring selling goods in other countries where TikTok Shop operates.

Jake Bjorseth, founder of the TikTok Shop partner agency Trndsttrs, described the flurry of TikTok ban planning as "doomsday prep."

"Fortunately, we've slotted much of this in advance, but it's still quite unclear where brands and creators reliant on TikTok are going to flow," Bjorseth said. "It'll certainly be a turbulent few months for folks reliant on it."

Nicole Rechtszaid, co-CEO of the e-commerce agency Ghost Agency, said the company has similarly stopped new business operations related to TikTok Shop and general TikTok content production in preparation for a possible TikTok shutdown. The company's revenue is heavily tied to the app, and if TikTok leaves the US, Ghost may need to consider alternative paths like merging with another company, she said.

"For our existing clients, we've aimed to shift them to alternative platforms, like Instagram Live," Rechtszaid said. "However, it is challenging to replicate TikTok Shop's success on platforms that do not have the combination of an engaging algorithm and native shopping features."

While some Shop businesses are deep into contingency planning, others hope to extract what they can from the platform while it's still around.

"We are continuing on as business as usual until we are told to stop," Lindzi Shanks, the cofounder of the gourmet marshmallow seller XO Marshmallow, told BI. "We also never put our eggs in one basket, so to speak. We have always diversified our social platforms and marketing efforts and continue to do so."

'It's going to put the industry back a few years'

Even as merchants and sellers hedge their bets by testing out alternative platforms, replacing TikTok Shop in the US is going to be tough.

Other apps excel in certain aspects of social commerce. Live shopping app Whatnot said it drove over $3 billion in sales last year, for example. But only TikTok offers an all-in-one place for sellers to run their social-commerce businesses, including a dedicated app store, affiliate marketing tech, and order fulfillment services.

"If it does get banned, it's going to be very bad for live shopping," the first TikTok Shop agency exec said. "It's going to put the industry back a few years."

Michael Herling, a Shop merchant who sells hats on TikTok under the brand Herling Handcrafted, said most of his business comes from TikTok sales and referrals. If TikTok does end up getting banned, he's planning to use Instagram and Facebook to advertise his business.

"It's a real bummer. I built my business on TikTok," Herling said. "I've been pretty depressed about it, knowing that if it gets banned it essentially shuts my business down."

• Whatnot closed a fresh $265 million Series E round at a roughly $5 billion valuation.
• CEO Grant LaFontaine plans to use the funds to add new features for sellers and enter new countries.
• Whatnot is betting that live shopping will eventually be commonplace in the US and other markets.

Investors are betting big that live shopping is here to stay.

Livestream app Whatnot announced on Wednesday that it closed a $265 million Series E funding round, bringing its valuation to around $5 billion.

The round was co-led by Greycroft, DST Global, and Avra Capital, with participation from Lightspeed Venture Partners, Durable Capital Partners, and Andreessen Horowitz, among others.

Whatnot hosts livestreams across categories including fashion, collectibles like sports cards and sneakers, and niche items like vinyl records and "storage unit finds." It makes money by taking a cut of the sales on its platform, which operates in North America and Europe.

Launched in 2019, Whatnot was an early entrant in the US in the live shopping category. Live selling drives hundreds of billions in annual sales in Asia but has been slower to gain adoption in other markets. The category has recently picked up steam in the US, driven in part by the popularity of TikTok Shop, which helped consumers get accustomed to buying from social media and livestreams.

"As consumers get used to purchasing in that format, as sellers start to build better businesses around it and then unlock really good inventory around it, adoption is just going to continue to increase," Whatnot CEO Grant LaFontaine told Business Insider.

Whatnot said it crossed $3 billion in livestream sales last year, roughly double what it pulled in for 2023.

In 2025, Whatnot also stands to benefit if TikTok, one of its biggest competitors, is banned in the US as mandated by a divestment law.

Whatnot's expansion plans in 2025

Whatnot plans to use its new quarter-of-a-billion dollars in funding for marketing, product, and engineering, as well as to support its expansion into new markets like Australia, LaFontaine said.

On the product side, the company wants to improve its merchant tools, including analytics and inventory management, and introduce new selling formats that could make livestreams more effective, he said. It's also investing in improving customer support. It plans to launch more product categories and double down on goods that performed well last year, such as golf items, as well.

Heading into 2025, LaFontaine said he expects the live-shopping phenomenon to lead to the creation of a new class of e-commerce content creators, a trend TikTok has also been driving.

"Just because you're entertaining on YouTube doesn't mean you have all the skills to be good at Whatnot," he said. "Live and social commerce will tend to create a new wave of its own influencers."

Whatnot said it's raised about $746 million in funding since its 2019 launch.

• Social shopping finally broke through in the US in 2024, driven by TikTok Shop.
• Companies spent years trying to import social-commerce habits from Asia, with varied success.
• The US market is still dominated by Amazon, but social apps and influencers are key players.

Social platforms have spent years trying to get Americans to buy stuff from videos, posts, and livestreams. That bet seems to finally be paying off.

The 2024 holiday sales from social media — driven by TikTok Shop and influencer affiliates, among other factors — show how far social shopping has come in the past five years.

TikTok Shop, which had its official wide launch in the US in September 2023, reported $100 million in single-day US sales on Black Friday this year, triple what it drove in 2023. Americans viewed over 30,000 TikTok shopping livestreams that day, with one creator picking up $2 million in sales from a single session.

The company's holiday gold rush didn't come easily. TikTok and its owner ByteDance have spent years investing in its e-commerce business, even as competitors like Instagram have pulled back on shopping features.

TikTok began testing out social-commerce features in the US as early as 2020 when it let creators add shopping buttons to some videos. It began rolling out its more advanced product, Shop, in the US to a group of merchants and agencies in November 2022 after testing in other markets like the UK. It's since built out its own order fulfillment program, enlisted hundreds of outside partners to train merchants and creators on how to sell in-app, and recently began connecting creators with manufacturers to build their own products.

TikTok likely wants to replicate some of the success of its sister app in China, Douyin, which drives hundreds of billions in sales annually, often via influencer livestreams. While TikTok's numbers are comparatively small, the company has made a ton of progress this year, social-commerce executives told Business Insider.

Max Benator, the CEO of the social-shopping agency Orca, said he expects to hit just under $100 million in total gross merchandise value, or GMV, in 2024 across the company's clients, a roughly 10X increase from 2023.

"We've now been on TikTok Shop since the very beginning, and we've seen successes gradually and consistently increase month over month," Benator told BI. "The numbers are serious."

Outlandish, a TikTok Shop agency that recently opened a livestreaming hub in Santa Monica, said its Shop sellers earned $48 million in US sales in November, up from $20 million in October. The company is betting that live shopping will continue to gain traction in the US, as it has in more mature social-commerce markets like China.

"It's QVC on steroids," Outlandish's founder and CEO William August told BI.

Affiliate marketing from influencers and others drove a fifth of Cyber Monday sales revenue

TikTok Shop's holiday performance was impressive for an e-commerce newcomer, but its business remains a small piece of overall holiday sales.

Total online Black Friday sales in the US hit $10.8 billion this year, up about 10% from 2023, according to Adobe Analytics. Online sales in the US between November 1 and December 2 reached $131.5 billion, and  hit $13.3 billion on Cyber Monday alone.

Retailers like Amazon, Walmart, and Target continue to dominate much of online spending, but social-media influencers and other affiliate marketers are playing an increasingly important role in driving purchases on those platforms.

About 20% of US e-commerce revenue on Cyber Monday arrived via affiliate or other promotional links, a 7% year-over-year increase from 2023, per Adobe Analytics.

Outside TikTok and affiliate marketing, other influencer-focused platforms are also reporting meaningful sales volume this year. Live shopping platform Whatnot said in November that it had surpassed $2 billion in year-to-date livestream sales, for example.

TikTok and its partners are proving that US consumers are willing to adjust shopping habits

When TikTok and competitors like Instagram and YouTube first began testing e-commerce features in the US, not all consumers were psyched.

Social media is for entertainment, not shopping, some said. Amazon and other big retailers have long dominated e-commerce, and changing consumer habits is a challenge. Instagram backpedaled on its shopping product last year, removing its Shop tab in February 2023 and eventually partnering with Amazon for its in-app shopping strategy.

But TikTok kept charging forward with social shopping. It enlisted an army of agency partners and livestream coaches to accelerate the adoption of Shop and flooded its feed with videos of creators hawking goods in exchange for a commission.

TikTok's owner ByteDance was likely behind the company's determination to make social shopping work as it sought to bring Douyin's success to TikTok.

Now that live shopping and social commerce are beginning to take hold in the US, TikTok and ByteDance's push into the category is paying off (though it all could fall apart if TikTok ends up being banned in January due to a divest-or-ban law).

"This is the year that we've seen the real beginning of live shopping in America," said Julian Reis, the CEO of SuperOrdinary, a social-commerce agency that's worked with TikTok and Douyin. "With TikTok, we've had the first real foray into building an ecosystem that ties in entertainment and live shopping together, and a full-service ecosystem that brings in the creators, the affiliates, the products, the brands altogether."

• Influencers and other affiliates drove about 20% of US Cyber Monday revenue, per Adobe Analytics.
• Posts with affiliate links were six times as likely to lead to a sale as other social content was.
• Social shopping has been on the rise in the US, as platforms like TikTok lean into e-commerce.

Influencers are helping to boost sales this holiday season — and getting paid to do so.

Social-media influencers and other content makers that recommend products via affiliate links helped drive about 20% of US e-commerce revenue on Cyber Monday, according to new data from Adobe Analytics. That's a roughly 7% year-over-year increase from 2023, the company said.

Affiliate linking is a marketing strategy where a figure of influence, such as a TikTok star or a product-review writer at Wirecutter, shares an item and earns a commission if someone buys it via a referral link.

Adobe Analytics found that products promoted via an affiliate link were six times as likely to lead to a purchase compared to content posted on social media by a brand or user that did not contain an affiliate-marketing or comparable promotional link.

This suggests that professional product endorsers are more effective at driving sales than other social-media users, Taylor Schreiner, a senior director at Adobe Digital Insights, told Business Insider.

"We're bombarded with information from all sorts of different channels, and people are finding that a recommendation from another brand they trust, be it an individual or a broader one, is of a lot of value to them in this attention-sapped environment," Schreiner said.

Affiliate marketing has become an increasingly important tactic for driving e-commerce sales as more consumers, and young shoppers in particular, turn to bloggers and other digital creators to decide what to buy. Fifty-two percent of 18- to 29-year-olds said their purchase decisions were influenced by social-media creators either somewhat or very often, per a YouGov survey conducted in December 2023.

Companies like Amazon, Walmart, and LTK have spent years building affiliate programs to compensate creators who drive sales.

LTK cofounder and president Amber Venz Box told BI that the company's creator partners were "able to earn a commission on pretty much every product that they're talking about, featuring, and using in their own lives." LTK said its creators drive billions in retail sales annually.

Social shopping has generally been on the rise this year, as platforms like TikTok introduce more robust e-commerce features, including live shopping. TikTok Shop drove over $100 million in single-day sales on Black Friday, a company spokesperson said.

Overall, consumers spent a total of $13.3 billion on e-commerce in the US on Cyber Monday, a 7.3% increase from the previous year, Adobe Analytics reported. Online spend for the five-day period between Thanksgiving and Cyber Monday reached  $41.1 billion. For its estimates, Adobe said it analyzes commerce transactions online across over 1 trillion visits to US retail sites and 100 million unique products, or SKUs.

• There's a new experiential store in Los Angeles that blends livestreaming with in-person retail.
• The space features rows of hosts selling products live on TikTok Shop.
• The project is the brainchild of Outlandish, an e-commerce startup with roots in China.

Welcome to the TikTok-era shopping mall.

A new brick-and-mortar store from the e-commerce startup Outlandish is bringing to life the world of TikTok Shop. It sits on a busy street in Santa Monica's 3rd Street Promenade, wedged between a Sephora and a Chipotle.

Business Insider stepped inside the two-story emporium ahead of its Thursday opening. It features a first floor of branded stalls where a lineup of hosts sit in front of bright lights and product displays as they hawk their wares to a TikTok audience. On its second floor, visitors can shop for goods from those sellers, which include brands like Goli Nutrition and the electronics company Anker.

The aim of the store is to mix live online selling with in-person retail. Passersby can buy viral products, gawk at influencers or merchants as they sell on livestreams, or even join the QVC-style streams themselves. Products and sellers will rotate, as merchants can rent out space by the hour.

The store's Santa Monica location is in a tourist hot spot. Like TikTok livestreams themselves — which are sometimes interspersed into the app's main feed — it's likely to draw in visitors who didn't originally plan to watch livestream shopping.

On Monday, the yet-to-open space was already packed with live sellers chattering away. It was loud — there were a handful sellers simultaneously recording in one room — but it was still easy to become engrossed in watching a single host.

It's As Seen on TV, but for the TikTok generation, William August, Outlandish's founder and CEO, told BI.

"This is 'As Seen on Livestream,'" August said. "I want people that come in to not feel like they're in a studio, but to feel like they're in a space where they can pop in the livestream. They can enjoy the experience. They can grab some free samples, and they can buy in-person. That's why our livestream rooms are not blocked off."

Outlandish's live-shopping concept taps into a broader effort among e-commerce startups, like SuperOrdinary, to make the live-selling model that exploded in China and other parts of Asia take off in the US. It's a big focus among TikTok Shop merchants who use the e-commerce platform to sell goods in videos, livestreams, and a dedicated shopping tab. TikTok itself is heavily focused on making livestream shopping successful in the US. The company recently hosted a summit for partners where it emphasized live selling.

TikTok and its owner ByteDance are aiming to recreate the success of its Chinese sister app, Douyin, which drives hundreds of billions in annual product sales. Features that are successful on Douyin often get pushed to TikTok next.

In addition to TikTok Shop, Outlandish has experience working with brands to help them sell on Douyin and other social apps.

How live selling could break through in the US

TikTok Shop is still a relatively young e-commerce platform, having launched in the US a little over a year ago. But it's gaining traction quickly as users become more acclimated to buying from a social app. Content creators on the app are now driving millions in sales in single live-selling sessions, which TikTok recommends should last a minimum of two hours.

In July, TikTok Shop's US gross sales began topping $1 billion monthly, The Information reported. Outlandish said it helped its partners earn $1.2 million in sales across 1,300 livestreams in a recent four-week window, adding up to nearly 3,000 hours of live streaming.

Live-selling studios are popping up in major cities like Los Angeles and New York. TikTok has some at its offices that it makes available to partners. Outlandish aims to expand beyond Santa Monica into additional locations in Mexico and Spain in 2025.

Outlandish isn't the only company trying to merge digital shopping with brick-and-mortar. Mall of America kicked off a livestream partnership with the e-commerce platform Popshop Live in 2020, for instance. Other TikTok Shop sellers have experimented with adding livestreaming spaces to their storefronts, such as the New York-based pre-owned luxury store What Goes Around Comes Around. And companies like Amazon have envisioned repurposing mall stores to service other e-commerce functions, such as fulfillment.

"This is a whole new industry that's just getting built in the US," August said. "Very soon, it will be a massive job market as well, with a lot of people that will come into the industry, and it'll be their job to be a live host or to be a live operator or to be a live moderator."

Outlandish, which began in 2018 as a social shopping agency in China, is an official TikTok Shop partner. Many of the sellers in its Santa Monica space work with the company on other parts of their TikTok Shop strategies, such as influencer affiliate marketing. But the company also hopes to draw in local Santa Monica businesses and influencers, too.

Outlandish makes money from the space by charging management fees for its live-shopping segments. It can get a percentage cut of online sales as well. The company declined to provide information on the cost or length of its Santa Monica lease.

Its US Shop business could get upended if TikTok ends up being pulled from app stores in January, as mandated by a divest-or-ban bill passed by Congress. If that does happen, August said Outlandish's Santa Monica sellers could pivot to livestreaming on other platforms.

"If TikTok does get banned, I don't think these people are just going to stop shopping through livestreams," he said.