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Chinese TikTok Vendors Bemoan The Platform's Increased Adherence To US Regulations, Citing Undermining

Chinese TikTok Vendors Bemoan The Platform's Increased Adherence To US Regulations, Citing Undermining
Chinese e-commerce vendors are dissatisfied with actions they claim the short video app has taken to tighten enforcement of its regulations for foreign sellers launching stores on the platform. These vendors want to sell their goods on TikTok Shop in the United States as an alternative to Amazon.
Five Chinese vendors on the platform and an industry group that represents 3,000 Chinese online retailers claim that Chinese-owned TikTok has recently adopted a stricter internal rules enforcement policy. TikTok faces the prospect of being forced to shut down its U.S. operations or face ban.
According to the vendors and Winnie Wang, executive chairman of the Shenzhen Cross Border E-Commerce Association, China's largest sellers group situated in the manufacturing region, TikTok is mandating that U.S. entities formed by sellers be 51% U.S. owned and chaired by a U.S. passport holder.
Chinese sellers claim they are at a disadvantage to American TikTok dealers since they must re-register as international sellers due to the rules. Many Chinese sellers have utilised U.S. corporations to be acknowledged as U.S. merchants on the platform.
About 170 million Americans use TikTok, and the company has been attempting to find the ideal mix between driving quick development and controlling regulatory risks.
In an attempt to catch up to more established competitors like Shein and Temu, which is controlled by PDD Holdings, it has been increasing the rhetoric that a U.S. move to ban the platform would cost creators and small businesses billions of dollars.
Since the launch of TikTok Shop in the United States in September 2023, the company has maintained its clear regulations and requirements for all sellers on its shop, including those from outside the country, according to a representative for the firm.
The spokesman stated, "TikTok maintains robust policies to protect customers and promote a trustworthy shopping environment, and we continually strengthen how we enforce our rules," without particularly addressing the question of whether foreign dealers are given less attention.
The Chinese vendors claimed that they felt singled out by TikTok's policies, and some are considering cutting back on the resources they dedicate to promoting sales on the site or looking for partners in the United States.
"We're reconsidering the amount of time and resources we dedicate to this," e-commerce vendor Jackie Bai, situated in Shenzhen, stated.
In contrast, he and another seller said that Amazon does not distinguish between American and foreign merchants on its marketplace; all have access to its "seller central" and are in equal competition.
There were no comemnts on the issue from Amazon.
Bai and two other vendors from China claimed to have heard from TikTok Shop representatives that the regulations were being tightened since TikTok is politically sensitive in the United States during an election year. TikTok refused to respond.
TikTok has stated that the company has never shared or received a request to share U.S. user data with the Chinese government. U.S. officials have questioned the app's security and privacy, implying user data might be shared with Beijing.
In the months after TikTok's U.S. launch, Chinese sellers offering anything from clothing to housewares to cosmetics have quickly expanded their presence on the platform. TikTok is owned by ByteDance.
"Almost every single consumer tech company I know based in China, and every Chinese consumer tech client we serve, is selling on TikTok, and those who are not selling are considering how and when to begin selling on TikTok," said Chris Pereira, CEO of business consulting group Impact.
According to an estimate from data source YipitData, TikTok's U.S. store had a gross merchandise value of $1.67 billion from its inception in September 2023 to the end of the year.
Regarding the veracity of YipitData's predictions, TikTok stated that it does not reveal sales information and did not respond to inquiries.
Sellers claimed that in addition to being lured by delivery cost incentives, they had looked for a channel of distribution other than the industry leader, Amazon.
According to Wang, about half of the Chinese sellers on the Amazon marketplace are based in Shenzhen.
These vendors, who are mostly tiny companies, apply to open "digital storefronts" and pay the platforms fees to maintain their accounts, advertise, and ship their goods.
In October, Bai launched a TikTok store in the United States that specialised in selling undergarments. By the end of February, he claimed that 20% of his sales came from the site.
He claimed that his TikTok store had prospered after he hired American actresses to endorse his products, but he did not want to reveal the name of his company or products out of fear of reprisal from the site.
Because he is a Chinese citizen, Bai claimed a TikTok sales representative informed him this month that he would need to close his U.S.-based organisation and re-register as an overseas vendor.
Now, realising that this would put him at a competitive disadvantage versus other vendors, Bai is reevaluating his approach and seeking out local partners.
"TikTok's shop is so new, the internal rules are changing every week, and these are particularly strict," he said.

Christopher J. Mitchell

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