By David Kirton
SHENZHEN, China (Reuters) – Chinese e-commerce vendors looking to sell products on TikTok Shop in the U.S. as an alternative to Amazon are expressing frustration over the platform’s tightened enforcement of rules for overseas sellers.
According to five Chinese vendors on the site and an industry association representing 3,000 Chinese online stores, TikTok, which is facing potential divestment or a ban in the U.S., has recently become stricter in enforcing its internal regulations.
Chinese vendors and Winnie Wang, executive chairman of the Shenzhen Cross Border E-Commerce Association, have stated that TikTok now requires U.S. entities registered by sellers to be 51% U.S. owned and led by a U.S. passport holder.
Previously, many Chinese sellers had used U.S. entities to be classified as U.S. merchants on the platform. However, with the new rules, they will need to re-register as overseas sellers, resulting in less visibility and support, putting them at a disadvantage compared to U.S. TikTok sellers.
TikTok, with approximately 170 million users in the U.S., has been striving to balance rapid growth with regulatory concerns. The platform has been emphasizing the economic impact of a potential ban while also aiming to attract more merchants to compete with larger rivals like Shein and PDD Holdings-owned Temu.
A TikTok spokesperson stated that the company has clear policies for all sellers, including international sellers, and these policies have remained unchanged since the introduction of TikTok Shop in the U.S. in September 2023.
Chinese vendors feel targeted by TikTok’s regulations and are considering reducing their efforts on the platform or partnering with U.S. entities. Some sellers have mentioned that Amazon treats all sellers equally without distinguishing between U.S. and international sellers.
Bai, a Shenzhen-based e-commerce seller, expressed concerns about TikTok’s changing rules and is exploring options to adapt his strategy to remain competitive against other sellers.
Chinese vendors have rapidly expanded their presence on TikTok’s shopping platform since its U.S. launch, seeking an alternative to Amazon and benefiting from subsidies on delivery costs.
They have established “digital storefronts” on the platform, paying fees for account servicing, advertising, and product delivery. Bai, for example, saw significant revenue from his U.S. TikTok shop within months of its launch.
Now, with TikTok’s evolving rules, vendors like Bai are reassessing their strategies and considering local partnerships to stay competitive in the ever-changing landscape of the platform.
