TikTok reported that more than 500,000 merchants were selling to US users on its app at the end of 2023, more than double the number from three months earlier, as the video service stepped up its e-commerce effort.

Worldwide, TikTok’s e-commerce platform had more than 15 million sellers in December, adding more than 6 million in the second half of the year, the company said Tuesday in its first TikTok Shop Safety Report.

The report underscored TikTok’s growth in e-commerce, as well as the ways it’s trying to keep shoppers safe. The company, owned by China-based ByteDance Ltd., said it blocked 2 million sellers from the app for failing to meet its policy requirements and removed 1 million for violating those guidelines.

E-commerce is seen by TikTok as its next big potential revenue source as well as a way to keep users spending time and money on its app. After starting Shop in Southeast Asia, the company has expanded to markets like the UK and, last year, the US. Users can shop through products tagged in both posted and live-streamed videos from their TikTok feed, or from the Shop marketplace tab that’s more like a traditional e-commerce site.

“While your traditional model might be scrolling through a list of products on a web page, we’re aiming to create an experience where it’s something more entertaining and engaging than that,” said Mary Hubbard, head of governance and experience for TikTok Shop Americas. “We want people to feel that their shopping experience is tailored and relevant to them, in the same way that they feel their ‘For You Feed’ is. Our focus is making sure the experience is a positive one, whichever way they do it.”

TikTok has faced heightened scrutiny over its parent company and the potential for the Chinese government to acquire user data or influence what people see on the app. The US Congress last week passed a law requiring ByteDance to divest its stake in TikTok by January or face a ban in the country. TikTok has said the Chinese government can’t access user data or influence the app and has threatened to take legal action to overturn the law.

The company said it spent more than $400 million on platform safety as it expanded the e-commerce effort and increased its governance team for the shopping site to more than 7,500 people in 2023. The company blocked more than 37 million products from appearing on the app in the second half of the year and removed 133,000 after listing for policy violations, TikTok said in its report. The company monitors for things like fraud, counterfeit products and intellectual property infringement.

“In general, I think as people become more familiar with our policies and safeguards we’ll see the types of violations change,” Hubbard said. “On day 1, a seller might not be as familiar with the paperwork they need to provide as day 365, for example.”

In addition to merchants, approved users can link products in their videos and livestreams and make a cut of sales made through the app. TikTok said it removed the e-commerce features from more than 500,000 creator accounts worldwide for policy violations in the last half of the year.

By Alex Barinka

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Fashion and beauty companies say they’re barreling ahead with marketing and commerce on the app, even as the clock starts ticking for owner ByteDance to sell it or shut it down.

A judge set Sept. 9 as the start date for the court hearing on the US Federal Trade Commission’s bid to block Tapestry Inc.’s attempted takeover of rival Capri Holding Ltd.

The preliminary injunction hearing will likely last a week and a half, the judge said. If the judge grants an injunction, that would prevent the companies from merging until after the FTC’s in-house court has a chance to decide the deal’s legality.

“I’m going to work to keep the case moving very quickly,” Judge Jennifer Rochon said during a hearing Monday in Manhattan federal court.

Tapestry shares rose 2.3 percent to $40.98 in New York trading Monday. Capri shares gained 0.8 percent to close at $35.83.

The FTC sued last week to block the $8.5 billion tie-up between the owners of Coach and Michael Kors, alleging the deal would raise prices on handbags and accessories in the affordable luxury sector.

Lawyers for the FTC told the judge that the merger between Tapestry, which owns the Coach, Kate Spade and Stuart Weitzman brands, and Capri, which runs Michael Kors, Versace and Jimmy Choo, would “eliminate fierce head-to-head competition” in the market in which both companies compete. A tie up would lead to “undue concentration” in the accessible luxury market, FTC lawyer Abby Dennis said.

Lawyers for both companies pushed back on the FTC’s allegations, reiterating that the handbag market in the US is competitive. They told Rochon they were unclear about how the agency was defining the accessible luxury market and requested more clarifying details from the FTC, such as whether a specific price range applies. “We’re kinda shooting in the dark here,” Al Pfeiffer, a lawyer representing Tapestry, said. “We cannot tell what the parameters are,” he added.

Tapestry lawyers also said they plan to subpoena competitors in the US handbag sector to gather details on how the market works to present to the judge. Rochon said there was “significant discovery that needs to take place.”

By Leah Nylen and Jeannette Neumann

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Shares of Versace Owner Capri Seen Falling 30% If Deal With Coach Owner Tapestry Fails

Since the merger announcement, Capri has reported weaker-than-forecast earnings twice, spurring concern about its performance in the coming quarters.

Join us for our next BoF Professional Masterclass on Thursday, May 16 at 16:00 BST / 11:00 EDT as BoF’s Diana Pearl, along with a panel of experts, break down the strategy that goes into creating a cultural moment that stands out, captures consumer attention and leads to a meaningful lift for a brand, whether in sales or affinity, on any budget.

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Online fast fashion retailer Shein is courting brands like toothpaste conglomerate Colgate-Palmolive and toymaker Hasbro as it tries to sell more household names on its platform.

Known for cheap own-brand clothing and accessories, Shein is moving into other categories and has given brands and retailers access to its platform in nine European countries so far, having done so in the United States, Brazil, and Mexico last year.

The strategy, part of Shein’s plan to build credibility and better compete with Amazon, is enabling the business to expand and develop new ways of selling goods ahead of a planned stock market listing later this year.

Shein presented its marketplace services at an event in Madrid last month alongside Colgate-Palmolive, Hasbro, Orangina maker Suntory Beverage & Food, and Spanish cosmetics brand Bella Aurora.

“Everybody associates Shein with fashion, but we are doing all verticals,” Christina Fontana, senior director of brand operations for Europe, Middle East and Africa at Shein, told delegates at a conference in Paris on April 17.

Seeing shoppers opening Shein and searching for other brands provided the impetus, Fontana said.

“Our consumers want brands, [so] if that’s what they’re looking for, that’s what we’re going to give them.”

Fontana, who previously worked for AliBaba, is one of several marketplace experts Shein has poached from the Chinese e-commerce giant and other firms.

That recruitment has helped fuel rapid expansion. Shein had an average 108 million monthly active users in European Union member states in the six months to Jan. 31.

But the company’s growth has brought new complications, including new EU rules requiring it to police its platform for illegal or harmful products.

In Europe, Shein’s marketplace is so far available in Britain, France, Germany, Italy, the Netherlands, Poland, Portugal, Spain and Sweden.

Whether the new marketplaces succeed and enable Shein to compete with Amazon and AliExpress will depend on what brands the company can attract, experts say.

“If Shein wants to compete as a trustworthy reputable marketplace platform, it really needs endorsement from well-known Western brands,” said Xiaofeng Wang, e-commerce analyst at Forrester in Singapore.

Supercharge Sales

In a Zoom webinar aimed at potential sellers in the United States on Thursday, Shein’s head of seller marketing Claire Lin pitched an opportunity for brands to reach millions of shoppers and “supercharge” sales.

“Our shopping experience is very sticky, it’s very much gamified,” she said. “It’s fun to shop on our site, so what we see is the minimum shopping time is around eight minutes, well above industry average.”

Shein shoppers are Gen-Z and Millennial, and skew female — with around an 80-20 split of women versus men, Lin said.

Home, electronics, and beauty & health are currently top-performing categories, she said, and the only category Shein does not offer is food and beverages.

The gross merchandise value (total value of products sold) in the home category tripled in 2023, while electronics grew by 2.5 times, and beauty & health grew by 2.1 times, according to a slide shown during the webinar.

Selling directly through a marketplace can provide a significant sales boost for brands. But before doing so, manufacturers typically seek assurances that the marketplace is a good fit for the audience they want to reach, and that they will have control over pricing and promotions.

Shein’s platforms have attracted many third-party retailers.

Products from beauty and skincare brands like Caudalie, CeraVe, La Roche-Posay, Shiseido, The Ordinary, Rimmel, and Weleda are currently being sold on Shein’s platform in the US, Britain, Brazil, and Mexico via third-party retailers.

Jayn Sterland, UK & Ireland country manager at Weleda, said the Swiss cosmetics brand was not considering selling on Shein directly.

When assessing a marketplace, reputation, perception, and environmental impact are among the key factors the brand looks at, Sterland added, pointing to sustainability initiatives Weleda works on with Amazon, where it sells directly.

Colgate-Palmolive did not reply to a request for comment. A Hasbro spokesperson said the company participated in the Madrid event “to talk generally about the pros and cons of marketplaces”.

A Suntory spokesperson said: “We don’t sell any of our drinks on Shein’s marketplace and we don’t have any plans to, this was just an opportunity to share best practise.”

By Helen Reid; Editors: Matt Scuffham and Mark Potter

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EU Hits Fast-Fashion Giant Shein With New Digital Rules

The move means Shein could be liable for fines of as much as 6 percent of global revenue for violating the law, designed to curtail the spread of illegal content online.