A potential TikTok ban threatens Chinese cross-border sellers’ US operations and ByteDance’s global ambitions

Luo said she wasn’t quite sure how to answer. “If it weren’t for this bill, I would definitely recommend that they do this in the US,” she said, adding that its US operations are “certainly more profitable” than those in other markets.

Other cross-border traders interviewed by the South China Morning Post are more certain. “It is not the time for newcomers to enter the US,” said Hong Ming, co-founder of the Shenzhen-based TikTok Seller Alliance.

The ‘divest or ban’ bill has thrown a spanner in the works of not only Chinese sellers planning to expand their business into TikTok, but also the platform itself, which has stepped up efforts to capitalize on its popularity among young Americans. through e-commerce.

But the clock is ticking for TikTok: the platform now has until January 19 next year – a day before Biden’s term ends – to fight to stay in the US, and ByteDance is unwilling to give up its first Chinese owner. app that has achieved worldwide popularity.

TikTok can afford to lose India, but not the US, because many globally viral TikTok clips are made by US users, according to a person familiar with internal discussions at ByteDance.

A U.S. departure for TikTok would also deal a blow to the ambitions of ByteDance’s billionaire founder Zhang Yiming, who launched the company in 2012 in a residential apartment building in Beijing. Before handing over the CEO and chairman positions to his co-founder and college roommate Liang Rubo in 2021, Zhang repeatedly spoke about his vision of a global operation based on TikTok.

That dream now seems increasingly remote, amid the growing rivalry between China and the US. While Beijing has been relatively restrained in its response to the TikTok law, the Chinese government has made it clear in the past that the powerful algorithms that power TikTok cannot be sold to American owners.

As uncertainty increases, influencers are starting to take precautions.

“It will definitely be damaging to see (TikTok) go away,” said Noah Jay Wood, who has 7 million followers on the platform. He said TikTok has better algorithms. “When something is trending, you are informed (by TikTok), unlike the other platforms, which are always late.”

While TikTok is the “foundation” on which he grows his content and following, Wood said he “recycles” all of his TikTok content for publication on Instagram and YouTube, “which has led to me finding a new audience on it” .

It is “absolutely” crucial for TikTok creators and merchants to diversify their presence regardless of a potential TikTok ban, said Alessandro Bogliari, co-founder and CEO of Miami-based agency The Influencer Marketing Factory.

“It’s risky to rely solely on one platform because of the ever-changing algorithms that impact how creators reach their audiences,” he said. What’s more, if TikTok is banned, creators and sellers “could face financial challenges as they try to establish new revenue streams.”

Despite its widespread popularity, TikTok is under intense competitive pressure.

According to a March report from market research firm Sensor Tower, nearly 94 percent of TikTok users in the U.S. also surfed YouTube in the past 90 days, while 80 percent used Instagram and 68 percent looked on Facebook.

“Google and Meta (Platforms) could be poised to leverage advertiser demand for short video placements as they both have a viable short video alternative in Shorts and Reels respectively,” said Abraham Yousef, senior insights analyst at Sensor Tower.

American shoppers already seem to be losing interest in TikTok.

Last month, the total value of goods sold on TikTok in the US was just under $419 million, which was down from $446 million in March, though still higher than February and the previous three months, according to EchoTik, an analytics and data provider focused on TikTok.

Two weeks ago, ByteDance soft launched TikTok Notes, a photo-posting app that competes directly with Instagram, in Canada and Australia.

Despite the bleak outlook, the US is still one of the top markets for cross-border merchants as the country remains a cultural trendsetter and consumers are better off there, said Wang Haizhou, founder of EchoTik.

“Once a brand becomes popular in the US, other markets will follow,” he said.

If TikTok eventually leaves the U.S., Hong of the TikTok Seller Alliance said he would use other platforms even though his existing store, powered by Shopify, “doesn’t compare to TikTok in terms of sales.”

Uebezz’s Luo said her next step would depend on the exact terms of the ban. If it were just a forced removal of TikTok from U.S. app stores, she said, it would still be able to reach U.S. users who already had the app installed on their phones.

For now, Uebezz is maintaining normal operations in the U.S., where many of the company’s goods are stored in a local warehouse, waiting to be sold, Luo said.

Hong advised sellers to remain calm and carry on. “Just do what you can and see how things develop before the 270-day deadline,” he said.