While most companies might have slowed down under such intense scrutiny, TikTok pressed forward. Its expansion into local services—connecting online content to offline commerce—became a cornerstone of its U.S. strategy.

This effort wasn’t without precedent. In 2021, TikTok made an early attempt with “TikTok Kitchen,” though it failed to gain traction. By 2024, the company pivoted to Southeast Asia, where it conducted small-scale pilots to refine its approach. These tests provided valuable insights into user behavior and operational challenges, laying the foundation for TikTok’s U.S. ambitions.

In March 2025, TikTok began assembling a local services team in the U.S. By August, it launched TikTok Go, a creator monetization program designed to promote local businesses via short-form videos. This model echoes Douyin’s success in China, where short videos and live commerce drive significant offline transactions.

Southeast Asia Test

TikTok began quietly testing a “Nearby” feature in Southeast Asia in 2022. By using location data to surface nearby shops, events, and local content, the product marked an early move toward repositioning the platform as a gateway to local services, not just entertainment.

The feature was first made available to a small group of users, who could discover nearby videos and merchant information inside the app—essentially localizing TikTok’s core recommendation logic. TechCrunch reported that the feature emerged publicly in August 2022, designed to boost visibility for local content and create conversion opportunities for businesses. According to Business Insider, the test also signaled TikTok’s strategic response to competitive pressure in Southeast Asia’s crowded e-commerce landscape.

From 2024, TikTok began running pilot programmes for its local services business in Southeast Asia, initially targeting Indonesia and Thailand. Access was restricted to selected users, with the aim of assessing engagement levels and merchant conversion. The tests relied on feed-based distribution, surfacing restaurant group-buy deals and discount vouchers for offline use.

The tests focused first on dining and later expanded to leisure and tourism services, allowing users to buy attraction tickets or obtain discounts for recreational activities, similar to an online-to-offline model. In Indonesia, the pilot involved a limited number of merchant groups, and early feedback showed conversion rates below expectations.

Despite its innovative approach, the pilot encountered significant challenges that hindered its scalability. Southeast Asia’s fragmented infrastructure posed logistical hurdles, particularly in the restaurant sector, where the density of chain establishments is far lower than in the U.S.

Many merchants struggled with fulfillment, making it difficult for TikTok to create a seamless experience. Additionally, TikTok’s attempt to replicate Douyin’s closed-loop ecosystem—where short-form videos drive offline transactions—proved overly ambitious in a region with underdeveloped systems. Further complicating the rollout were shifting regulatory policies and inconsistent frameworks across markets, which made standardization nearly impossible.

These obstacles underscored the need for TikTok to adopt a more focused and pragmatic approach as it prepared to expand its local services into the U.S. market.

TikTok Go in the US

In early March 2025, TikTok began recruiting for its U.S. local-services team, a clear sign that experimentation was giving way to execution. The goal is to bring merchants and creators into closer orbit—starting with food and travel—using an O2O formula already tested, and tamed, by Douyin in China.

According to Axios, TikTok is moving ahead with its U.S. local services expansion, confirmed through job postings and internal sources, with hiring concentrated in cities such as Seattle, Los Angeles, and New York. Social Media Today said the push is aimed at increasing in-app transactions, with roles focused on evaluating connections between local merchants and the platform. TubeFilter added that TikTok’s teams will work directly with small and mid-sized businesses to roll out coupons and incentive programmes.

In August 2025, TikTok formally launched TikTok Go, a creator monetization program that directly links short-form video to local services transactions. Built around a commission-based model, the initiative incentivizes creators to promote local merchants in everyday content—an important step in converting TikTok’s traffic advantage into scalable transaction volume.

Under the program, TikTok Go uses an affiliate marketing model that allows eligible creators to tag locations in videos and earn commissions when users complete bookings. The initiative currently focuses on hotel and travel-related services, which offer clearer monetisation pathways.

TikTok Go is being rolled out cautiously, with access limited through an invitation-only system. Eligible creators are generally required to be at least 18 years old, have a minimum of 1,000 followers, and maintain a good account record. The criteria are designed to manage risk while ensuring content quality during the program’s early phase. They have launched initially in the United States, Indonesia, and Japan. In the U.S., the early rollout is focused mainly on hotel bookings, highlighting the company’s strategy of testing monetisation in established travel and local services sectors.

TikTok Go represents more than just another creator incentive program. It integrates creators, content distribution, and transactional services, positioning TikTok as a gateway for local commerce. This shift signals the platform’s evolution from a traffic-driven app to a commerce-oriented ecosystem.

Facing mounting regulatory pressures in the U.S. and Europe, Chinese e-commerce giant Temu is shifting its growth strategy from its core U.S. market to Europe. A widely circulated Chinese industry report highlights that Temu is pivoting its business model from “fully managed” to a “half-managed” approach while overhauling its global logistics network to achieve profitability before regulatory risks fully materialize.

External pressures are intensifying. The European Union’s Digital Services Act (DSA) recently flagged Temu for potential violations in product safety and supply chain management, which could lead to fines of up to 6% of its global revenue. Meanwhile, stricter U.S. tariff policies have caused a drop in Temu’s sales, accelerating its investment in overseas warehouses and multimodal transport networks. To date, Temu has established several self-operated warehouses worldwide to stabilize its supply chain and prepare for the possible termination of de minimis exemptions.

Despite these challenges, Temu’s adjustments showcase the adaptability of Chinese cross-border e-commerce businesses in navigating global policy barriers. By localizing its supply chain and optimizing its business model, Temu is opening up new growth opportunities in Europe, which is quickly becoming the company’s most critical strategic focus for the next phase of expansion.

Europe Overtakes North America

The third quarter of 2025 was transformative for Temu, as its GMV surged to $24 billion, with year-to-date figures reaching $60 billion. While the company still targets $100 billion in annual GMV, insiders and analysts now expect a more realistic range of $90 billion to $95 billion.

The big shift? Europe has officially overtaken North America as Temu’s largest market, contributing 40% of Q3 GMV compared to the U.S.’s 31%. This milestone signals a strategic pivot for the company, which is now doubling down on the European market. Over the past two years, Temu has quietly laid the groundwork for this transition, building warehouse networks, testing marketing strategies, and forging local partnerships.

The UK, France, Germany, Italy, and Spain were standout performers, with GMV growth in these markets hitting 80% to 100%. Meanwhile, U.S. growth slowed due to lingering tariff issues and internal strategic adjustments earlier in the year.

Latin America is also emerging as a key player in Temu’s growth. With GMV growth of 70% to 80%, countries like Brazil and Mexico are proving critical to the company’s long-term goal of reaching $140 billion GMV by 2026. As Temu continues to expand its product offerings and local infrastructure in these markets, its diversification strategy is beginning to pay off.

Bet on Half-Managed Model

2025 has been a challenging year for Temu, marked by rising costs and increasing regulatory pressures. To adapt, the company has shifted its focus toward a “half-managed” model while restructuring its global logistics and fulfillment network to maintain operational stability in a more complex environment.

The half-managed model, which includes “local-to-local” operations, now accounts for 34% of Temu’s global GMV, up from earlier levels, while the fully managed model has dropped to 66%. Notably, the half-managed model boasts a higher average order value of $55 compared to $32 for the fully managed approach. Analysts view this shift as a critical step toward profitability, as the new model cuts fulfillment costs and improves gross margins. For instance, in the U.S., where the half-managed model has the highest penetration at 38%, net profit margins have risen from 2% last year to 4% this year.

Logistics is also undergoing a transformation. Temu is scaling up multimodal transport to reduce its reliance on expensive air freight. In Europe, the share of air shipments has dropped to 35%, replaced by sea and rail freight. Similarly, in the U.S., sea freight now accounts for 50% of shipments. These adjustments have significantly lowered fulfillment costs. For example, in Europe, fully managed air freight incurs an 8% loss, while sea and rail freight reduce losses to just 2%. In the U.S., fully managed sea freight is nearing breakeven, with losses around 1%, compared to 7%-9% for air freight.

Anticipating potential regulatory changes in Europe, such as the elimination of the €150 tax exemption, Temu has prepared to adopt a B2B2C customs clearance model. By optimizing its clearance processes, the company expects to keep actual tariff costs within 5%-8%, ensuring its price competitiveness remains intact.

The True Enemy

In Europe, Temu’s fiercest competition is not with Amazon but with its fast-fashion rival SHEIN, whose business model closely mirrors its own.

Temu has outpaced SHEIN in order volume in key markets such as the UK, Germany, and France. However, SHEIN retains a GMV advantage, with an average order value of $50 compared to Temu’s $33. Analysts note that SHEIN represents a more significant challenge to Temu than Amazon.

The most intense rivalry is in the half-managed business segment, where the two companies share a 70% overlap in product offerings, supply chains, and customer bases. Temu has responded with an aggressive pricing strategy, slashing prices by 5%-15% on overlapping products to accelerate market penetration.

Temu’s competition with Amazon, by contrast, is more strategically misaligned. Fully managed product overlap between the two is less than 5%, with Temu avoiding high-risk categories like IP-sensitive goods, food, and publications. Instead, the company focuses on fast-moving, competitively priced products that appeal to price-conscious consumers.

Temu’s pricing strategy is its strongest weapon. Half-managed products are priced 10%-20% lower than Amazon’s, while fully managed goods are up to 60% cheaper. This approach has allowed Temu to secure a unique foothold in Europe while avoiding direct competition with Amazon.

As Temu transitions from rapid growth to profitability, its goals are clear. The company expects to break even in the UK by October, achieve profitability in its five core European markets by Q4, and reach breakeven for the entire European region by December.

On July 23, DJI launched its Osmo 360 camera for RMB 2,999, underpricing Insta360’s similar product by RMB 800. Just five days later, Insta360 CEO Liu Jingkang announced its entry into the drone market with the launch of its new brand, “Antigravity.” By August 1, the rivalry escalated further as Insta360 cut the price of its latest product by RMB 500, intensifying the competition.

The clash highlights a shift in the market, where DJI, a leader in drones, and Insta360, a global force in 360-degree cameras, are testing each other’s dominance. Industry insiders call it a “mutual invasion,” as both companies expand into each other’s product categories.

With the global imaging hardware market valued in the tens of billions, this battle is expected to drive significant changes across the industry.

Under the Surface

The rivalry between DJI and Insta360 dates back to 2021, when both companies began aggressively recruiting each other’s top talent. Engineers with expertise in hardware design and software algorithms became highly sought after. Insta360 ramped up its hiring of drone engineers to prepare for a product expansion, while DJI focused on acquiring specialists in panoramic imaging and AI.

This talent war rippled through the industry, driving up salaries and drawing in engineers from traditional camera makers with expertise in optics and image processing. These hires would later prove pivotal in developing innovative products that blurred the boundaries between drones and cameras.

The competition came into sharper focus in September 2022 with DJI’s launch of the Osmo Action 3, a robust action camera boasting 4K/120fps video, a quick-release design, and extended battery life—all at an aggressive price of RMB 2,299. This marked DJI’s official entry into Insta360’s territory.

Insta360, however, responded with agility. By June 2023, the company launched the GO 3, a thumb-sized, ultra-portable camera that avoided direct competition with DJI and instead carved out a unique niche in the market.

While GoPro remains the global leader in action cameras, recent data from 2023 shows that Insta360 and DJI are closing in. As the three brands converge in technology and audience, the market is poised for a new era of fierce competition.

Blurring Boundaries

The DJI-Insta360 rivalry hit a new peak in 2024, evolving from a product skirmish into a battle for dominance in the smart imaging market. Industry shifts, like the standardization of sensors and chips, made this clash inevitable. Shared components, such as Sony sensors and Qualcomm chipsets, gave both companies the flexibility to cross into each other’s domains—drones for Insta360 and action cameras for DJI.

But this battle isn’t just about hardware. Advances in software have blurred the lines between drones and 360-degree cameras, allowing for similar system logic and features across both product categories. Consumer behavior, driven by demand for short-form video and livestreaming, is also reshaping strategy. Users now want seamless, hybrid solutions: 360-degree imaging, aerial perspectives, and compact portability combined in one ecosystem.

DJI, facing saturation in the drone market and global regulatory hurdles, pivoted its expertise in stabilization and flight control to imaging devices. Insta360, meanwhile, remains under pressure to deliver growth after its June 2025 IPO, which valued the company at RMB 70 billion. Despite commanding 60% of the global 360-camera market, its niche category cannot sustain such high expectations.

The two companies’ approaches reflect their founders’ differing philosophies. DJI’s Frank Wang is relentless in engineering precision, evident in the Osmo 360’s advanced specs like mechanical stabilization and waterproofing. Insta360’s Liu Jingkang, on the other hand, focuses on user-centric innovation, opting for a third-party collaboration model to quickly launch the Antigravity drone project.

These back-to-back launches signal a new phase for the industry. DJI’s dominance and Insta360’s agility are reshaping the landscape of smart imaging hardware.

The rivalry between DJI and Insta360, which had been steadily escalating, spilled over into market sentiment by mid-2025, showcasing the financial stakes of their battle.

On July 23, DJI’s launch of the Osmo 360 camera sent shockwaves through the market. Insta360’s shares plummeted 8.5% that day, wiping out over RMB 5 billion in market value. Investors viewed this as a direct challenge to Insta360’s core business, raising doubts about its long-term growth prospects.

But Insta360 didn’t stay on the defensive for long. Just five days later, the company announced its bold move into DJI’s territory with the unveiling of its “Antigravity” drone. This announcement reversed market sentiment, with shares surging 15.2% to a post-IPO high. By mid-August, Insta360’s market cap had climbed to RMB 107.9 billion, demonstrating its ability to adapt and pivot under pressure.

“This wasn’t just about regaining confidence—it was Insta360 going on the offensive,” said an analyst. “They showed strategic clarity and execution that investors could rally behind.”

Now, the rivalry is expanding into a three-way battle with GoPro, as DJI and Insta360 chip away at the action camera leader’s dominance. While DJI and Insta360 attack each other in drones and 360 cameras, they stand shoulder-to-shoulder as challengers to GoPro’s crown.

Globally, the stakes are high. Insta360 is making significant inroads in the U.S., where it generates 23% of its revenue and is winning over younger consumers on platforms like TikTok and YouTube. DJI, meanwhile, dominates the U.S. drone market with an 85% share but faces increasing regulatory scrutiny, including its inclusion on the NDAA blacklist, which bars federal agencies from purchasing its drones.

In Europe, Insta360 delivered a 79% revenue growth between 2022 and 2023, while DJI employs a dual strategy: emphasizing premium products in mature markets like the UK and France and affordability in developing regions.

As GoPro’s stock dropped 12% following the launch of DJI’s Osmo 360, the once-dominant market leader now finds itself under siege. The global imaging hardware market is being reshaped by two Shenzhen-based disruptors rewriting the rules of competition.

Meanwhile, GoPro—once the undisputed leader in the category—continues to lose ground. By 2024, GoPro’s annual revenue had fallen 20% to $800 million, and the company posted a $432 million net loss. Its market cap now stands at just $200 million, a sharp drop from its former $13 billion peak.

Insta360’s story stands out for its strong growth. In 2023, it posted RMB 3.636 billion in sales and RMB 830 million in net profit, with 70% of revenue coming from overseas, primarily through e-commerce channels.

The company’s success is part of a broader trend: since this year, a new wave of Chinese cross-border e-commerce companies have rushed to list. Anker, which went public in 2020, has set a strong example for other companies which produces domestically but targets overseas consumers, are leveraging platforms like Amazon for global expansion. Industry veteran Wei Zhe, founder of Vision Knight Capital, believes China’s A-share market could soon see an entire sector dedicated to cross-border e-commerce.

A New Wave of IPOs

Founded in 2015 and headquartered in Shenzhen, Insta360 has rapidly become a powerhouse in high-performance imaging. Specializing in 360-degree, VR, and action cameras, the company’s relentless pace of innovation has paid off—Insta360 now commands 81.7% of the global 360 camera market and is second only to GoPro in action cameras. Its IPO prospectus highlights that more than 70% of its revenue comes from outside China, a testament to its international reach driven largely by online sales.

The company’s ascent is emblematic of a wider trend: since May 2025, a new wave of Chinese cross-border e-commerce players has rushed to go public, igniting investor enthusiasm for “cross-border stocks.” Unlike previous cycles built on fast fashion or marketplace arbitrage, this cohort is led by hardware and technology brands, signaling a shift in China’s global business ambitions.

Taili Technology, a Guangdong-based home goods maker, went public on May 19 with its shares soaring 200% at debut and a market cap reaching RMB 5.8 billion. After years as a traditional manufacturer of vacuum bags and wall racks, Taili pivoted in 2019 to capitalize on Amazon’s B2C boom, focusing on private-label exports and value pricing. The move paid off: by 2024, overseas revenue more than doubled, now accounting for over 32% of the company’s total.

On May 27, Dongguan-based SainStore joined the public markets, distinguished by its heavy reliance on direct-to-consumer (D2C) sales—96% of its revenue comes from cross-border D2C, with Amazon representing more than 70%. SainStore’s strength lies in its specialized brand portfolio, including heated apparel line ORORO and home tech brand Airthereal, which drove its 2023 revenue past RMB 1.5 billion.

IPO momentum is building across categories. Govee Technology, founded by former Anker executive Wu Wenlong, is prepping for an IPO as it expands smart LED and home lighting sales in Europe and North America, hitting RMB 4 billion in revenue in just seven years. Automotive parts supplier Yangteng, founded by Fuzhou University alumni, operates three distinct brands and manages over 100,000 SKUs. Robotics firm LDROBOT, which specializes in visual perception tech for smart devices, filed for IPO after growing revenue 68% to RMB 467 million in 2024, with its lidar and sensors now powering over six million smart robots globally.

Meanwhile, Makeblock and Narwal are rumored IPO candidates. Makeblock, once focused on educational robotics, pivoted to launch xTool, a consumer brand for laser engravers and 3D printers, and now generates over RMB 1 billion in global sales. Narwal, founded by engineer Zhang Junbin, has become a leader in home cleaning robots, posting 130% revenue growth in 2024 and securing partnerships with Amazon, Costco, and Best Buy as overseas revenue soars.

What unites these companies is their sizable R&D investment, well-defined product strategies, and sharp focus on global consumer trends. This new generation of Chinese tech brands is rewriting the cross-border playbook—moving from manufacturing to innovation and global brand-building.

The Fall of Bulk-Listing Sellers and the Rise of China’s Global Brand Leaders

The current wave of Chinese cross-border IPOs isn't the first. Just a few years ago, Amazon-focused Chinese sellers were racing to public markets with equal fervor—though their approach couldn't have been more different.

The gold rush began in 2014 when Global egou became the first Chinese cross-border e-commerce firm to go public through a RMB 1.032 billion acquisition by Baiyuan Trousers. Renamed "Global Top" in 2015, the deal opened the floodgates for a capital frenzy that would define the next several years.

By 2016, the sector was on fire. YKS (Youkeshu), a major player, saw revenues explode from RMB 1.079 billion in 2015 to RMB 2.486 billion in 2016—a staggering 140% jump. The company pursued a backdoor listing through a RMB 3.4 billion merger with Tianzhi Information. Others followed suit: Huading acquired TOMTOP for RMB 2.9 billion, marking another milestone in the rush to public markets.

These companies built their empires on what industry insiders called the "bulk-listing" model—a brute-force approach that prioritized quantity over quality. YKS expanded from 140 stores in 2016 to 3,873 by 2020, a nearly 28-fold increase. Yibai operated 1,846 stores while churning out 12,000 new products monthly. TOMTOP managed a sprawling catalog of over 550,000 SKUs across dozens of categories, from electronics to home goods.

The strategy seemed unstoppable—until Amazon struck back. In 2021, the e-commerce giant launched a sweeping crackdown on Chinese sellers, citing policy violations ranging from fake reviews to manipulated rankings. The purge was devastating: thousands of accounts vanished overnight, freezing millions in seller funds. YKS alone reported RMB 130 million in frozen assets. TOMTOP lost 54 stores and saw RMB 41.43 million frozen, representing 4.27% of its 2020 cash reserves.

The crackdown exposed the fatal flaw in the bulk-listing model: its complete dependence on platform goodwill and regulatory arbitrage. Almost overnight, sellers began abandoning the strategy, recognizing that sustainable growth required more than flooding marketplaces with products.

Into this void stepped companies like Anker Innovations, which had been quietly building a different model. Best known for its charging accessories, Anker prioritized R&D investment, product quality, and brand development over SKU proliferation. The company's success—it went public in 2020 with a valuation exceeding $8 billion—pointed toward a new paradigm for Chinese cross-border commerce.

Today's "go-global" firms represent the evolution of this model. These companies typically generate over 30% of revenue from international markets, own strong proprietary brands, maintain control over critical supply chain elements, and have established themselves in core retail channels worldwide. Unlike their predecessors who relied on marketplace arbitrage, this new generation is building lasting competitive advantages through innovation and brand equity.

The shift represents more than a business model change—it's a fundamental reimagining of how Chinese companies compete globally. Where the previous generation sought quick profits through volume, today's leaders are investing in the patient work of building world-class brands.

Although a May 12 truce in Geneva temporarily reduced tariffs on some goods to 30%, small-parcel rates remain at 54%. E-commerce platforms like Shein and Temu, reliant on direct small-parcel shipping, are among the hardest hit and are scrambling to adjust.

Shein: Price to Premium

Shein had already begun shifting gears long before the tariff shock:

• U.S. POP Launch: In end April, Shein rolled out its U.S. POP self-operation model—sellers ship from China while Shein-approved carriers handle logistics and inventory. Sellers retain pricing control but cover their own shipping fees.

• Ad Spend Shuffle: From late March to mid-April, Shein's U.S. ad spend fell 19%, while France (+45%), the U.K. (+100%) and Brazil (+140%) saw big increases.

• Operational Efficiency Optimization: In early 2025, Shein consolidated its product categories into four primary groups, streamlining management and marking a shift from competing on price to focusing on efficiency.

• Semi-Managed, Fully Global: After Europe and U.S., Shein is expanding its semi-managed model to Canada, the Middle East, Japan, and Australia in 2025. The approach—local inventory and fast delivery—helps improve service and sidestep tariffs. After launching in Japan (March) and the Middle East (April), Shein teamed up with JD Logistics in May to recruit local sellers. Meanwhile, on May 9, it ramped up U.S. hiring for warehousing and logistics roles.

• Vietnam Warehouse: Shein is leasing 15 hectares near Ho Chi Minh City for its first Vietnam warehouse, Reuters reported May 16. The facility—roughly 26 football fields—will store goods from local contractors ahead of export.

Temu: Blitz to Balance

Temu swiftly pivoted to local fulfillment and broader market reach, reshaping its operations to reduce reliance on China and mitigate geopolitical risks.

• Y2 Model: On April 27, Temu launched its Y2 model, allowing sellers to use their own carriers to ship directly from China to the U.S after receiving confirmed orders. Though listings still say "Local Warehouse" and "No Import Fees," "Pre-sale Delivery: 11 to 14 Business Days" are noted.

• Transitioning Sellers to Semi-Managed Model: Previously, fully managed sellers shipped goods to Temu’s domestic warehouses, with the platform handling everything from ocean freight to last-mile delivery. Now, under the semi-managed model, sellers must manage these logistics themselves—a more complex arrangement. While a return to the fully managed model in the U.S. is being considered as tariffs ease, insiders say its feasibility depends on policy shifts.

• Ad Strategy Shift: In early April, Temu cut U.S. ad spend on Meta, YouTube, and X by 31% and halted Google Shopping ads entirely after April 9. U.S. app downloads fell 62%, with the app dropping from the top 10 to No. 69. Meanwhile, ad spend rose 40% in France, 20% in the U.K., and surged 800x in Brazil.

• Expanding Overseas Seller Network: Temu is leveraging local warehouses to grow its network of international sellers while increasing product exports to Southeast Asia and Latin America. Morningstar predicts that by the end of 2025, 15% of Temu’s GMV will come from products exported outside of China.

TikTok Shop: Views to Value

TikTok Shop's key edge over rivals lies in its creator-driven model. Alongside expanding fulfillment, the platform doubled down on content while accelerating global rollout in 2025.

• Global Push: TikTok Shop ramped up its global reach this year, launching in Mexico, Brazil, and Japan. Mexico lured sellers with 90 days of zero commission. Japan's self-operated store offers both direct-from-China and local delivery, with full openings set for June 3. In Europe, it expanded into Germany, Italy, and France in March—completing coverage of six key EU markets—while easing access for Chinese and Hong Kong sellers to run one store globally with unified content.

• Logistics Upgrades: TikTok Shop's PEAKS plan, unveiled April 17, adds flexible shipping options—mixing direct and warehouse fulfillment—rolling out in May. A new "TikTok Shipping" program, expected in Q2, aims to cut delivery costs by up to 20%. Sellers can handle fulfillment themselves, lowering entry barriers and capturing margins through platform-backed subsidies.

• Views to Value: As of May 15, TikTok Shop is doubling down on original content. Certified posts earn 20% more traffic, top creators get twice the reach, and local warehouse-stocked goods enjoy a 30% search boost. Platform fees dropped for beauty and electronics. AI-generated portraits are banned, and shipping speed now factors into seller ratings.

TikTok Shop USA's gross merchandise value (GMV) fell 15.52% in April to $882.19 million, or about $29.4 million in daily sales—reversing March's 47.04% surge that marked its first growth since November 2024.

The drop comes as newly imposed tariffs by President Donald Trump on Chinese goods begin to weigh on cross-border e-commerce.

According to Kalodata, the top 10 product categories brought in $646.64 million in GMV, down 14.33% from March. Beauty & Personal Care (19.16%), Womenswear & Underwear (13.14%), and Health (9.62%) accounted for a combined 41.92% of total GMV, up 2.54% month-over-month.

Category Analysis

Only the Health category posted growth in April, up 7.63%. The other top categories saw declines ranging from 6.23% (Fashion Accessories) to 48.03% (Food & Beverages). Automotive & Motorcycle entered the top 10 for the first time, displacing Household Appliances with $24.63 million in sales.

Meanwhile, average prices for top-selling items continued climbing. In April, the top seven products ranged from $29.46 to $114.15—up sharply from February's $9.57 to $34.93 range.

Brainista's Yerba Mate Instant Tea Powder (Health > Nutrition & Wellness) remained the top seller with $2.97 million in revenue, down from $3.75 million in March. Medicube's Skincare Set (Beauty & Personal Care > Skincare) ranked second with $2.5 million, followed by Zooone Nature's NAD+ Berry Drink Mix (Health > Nutrition & Wellness) at $2.17 million.

As in March, two of the top three products were functional drinks—highlighting growing consumer interest in supplements and wellness beverages.

Vendors Spotlight

The top 10 TikTok Shop sellers remained largely stable in April, though two newcomers—POPMART US SHOP (Collectibles) and Color Wow Hair (Beauty & Personal Care)—shook up the rankings.

POPMART US SHOP soared to No. 2 with $4.82 million in sales, driven by the launch of its LABUBU "THE MONSTERS Big into Energy Series" trendy toys. TikTok Shop was the brand's exclusive online launch channel in the U.S., with 20,000 units set aside for livestreams to build scarcity. On April 25 alone, POPMART generated $511,300 in sales.

According to its 2024 annual report, Pop Mart's TikTok Shop revenue surged 5,780% year-on-year to 262 million RMB ($36.26 million), with its share of online sales jumping from 2.9% to 18%. Its U.S. TikTok store now has over 432,700 followers and 2.3 million likes.

Color Wow Hair, a celebrity-favorite brand founded by Gail Federici, entered the top 10 with $3.59 million in sales, led by its Dream Coat for Curly Hair ($1.24 million at $24). Known for products favored by stars like Kim Kardashian and Jennifer Lopez, the company generates roughly $300 million annually. Federici is reportedly exploring a sale that could value the brand at around $1 billion, per Reuters.

Medicube US Store climbed to the top spot despite a decline in sales to $5.53 million from $7.69 million. Its hero product, the Glass Glow Skincare Set, brought in $2.5 million alone, with an average price of $114.15.

Recent trends suggest that bundled skincare kits and multi-pack beverage deals—often sold with tiered pricing—are lifting average order values while offering shoppers perceived savings, despite unclear unit pricing.

On April 27, Brands Factory received notice from Temu's seller acqusition team about the launch of a new supply chain model, dubbed "Y2," tailored specifically for its US market.

Previously, Temu's semi-managed model required merchants to first ship products from China to US-based warehouses. Or else, sellers would face penalties.

The new Y2 model streamlines this: After a US consumer orders, merchants can now directly ship from China. Goods are picked up domestically, air-shipped to the US, cleared through customs, transferred to a local courier pickup point, and finally delivered to the end customer.

From Fully-Managed Model to Y2

Temu introduced its fully-managed model when it entered the U.S. market in September 2022. Under this system, sellers were responsible solely for product offerings, while Temu took charge of logistics, customs clearance, warehousing, pricing, and marketing.

However, with the rising risks posed by high tariffs, the model became increasingly burdensome for Temu. As a result, starting in the second half of 2024, the company began scaling back its reliance on the fully-managed model, urging sellers to transition to the semi-managed alternative.

Temu launched its semi-managed model in 2024, responding to the U.S. decision to abolish the duty-free policy for low-value shipments. In this model, merchants take charge of pricing, inventory management, and some operational aspects, while Temu oversees logistics and warehousing.

This shift has reduced Temu's operational load and sped up delivery times, enhancing the customer experience. However, with escalating tariffs and frequent regulatory changes, many sellers are wary of stocking up, facing higher shipping costs and growing uncertainty.

The Y2 model was officially launched on April 27, 2025. Under this new framework, merchants remain responsible for the initial shipping, customs clearance, and final delivery, but unlike the semi-managed model, they no longer need to pre-stock inventory. Instead, they ship products only after receiving confirmed orders, reducing the risk tied to shifting policies.

Additionally, Y2 model listings will benefit from semi-managed traffic support, giving merchants a potential edge in visibility over those in fully-managed stores when selling the same products.

Temu's Tactics Towards Trade War

Facing skyrocketing tariffs and the end of de minimis exemption, Temu is changing the playbook for merchants.

Temu managers confirm the platform now allows each seller—including those from Hong Kong and mainland China—to operate up to three semi-managed stores with direct shipping from China.

Merchants can choose a 9-business-day fulfillment period, exempt from any penalties previously associated with delayed delivery.

These moves are part of broader strategic adjustments by Temu:

• The platform has dramatically accelerated its shift of traffic away from fully-managed stores towards semi-managed ones, especially since April.

• Fully-managed products pages have been significantly reduced, with Temu actively urging merchants to transition top-selling items into semi-managed stores.

• Both existing and new merchants can now open dedicated "China-direct" stores, although new setups cannot mix inventory with existing stores. This initiative currently targets only the U.S. market.

• Temu has introduced a new logistics option allowing merchants to select a 9-business-day shipping schedule, considerably longer than the original 2-day fulfillment period.

Merchants opting for this longer shipping timeframe will be marked accordingly in the system but won't face penalties. Temu mandates initial shipment to an overseas transfer warehouse, with final delivery handled via the platform's CALL labeling system.

From the consumer perspective, the only notable difference is longer waits for deliveries.

Costs Cut, Risk Shifted

Temu's merchants say the newly launched Y2 model closely mirrors Amazon's FBM (Fulfilled by Merchant) approach, letting sellers ship orders directly to consumers. It significantly eases sellers' cash constraints and lowers their risk when experimenting with new products—particularly helpful for seasonal or fast-moving categories.

From Temu's viewpoint, clinging to the old semi-managed model presents mounting overseas inventory risks due to volatile tariffs. Merchants' hesitation to stock U.S. warehouses can lead to shortages, while the fully-managed model burdens Temu with high warehousing and logistics costs, forcing price hikes that could alienate consumers.

With Y2, Temu pushes customs-clearance risks onto sellers, reducing its own warehousing and shipping expenses. Sellers dispatch products from China only after orders are confirmed, lowering their inventory financing burdens. This also allows Temu to scale by onboarding more sellers without overseas warehouse.

Analysts point out that Y2 slightly compromises Temu's delivery-speed advantage, but effectively maintains its core appeal—low prices.

Temu isn't alone in its strategic pivot. AliExpress, Shein, and even TikTok are reportedly adopting similar logistics tactics, shifting customs-clearance responsibilities onto merchants to mitigate tariff impacts.

On March 20, Amazon hosted a private meeting in Shenzhen with dozens of vendors from South China, followed by a similar session in Shanghai with major brands like DJI, Midea, and Philips.

"It's been over two years since we last met with vendor managers . This time, they came to reconnect, especially with many new faces after a team reshuffle," one vendor who attended the meeting noted. Even vendor managers handling U.S. and global markets traveled long distances to meet Chinese verdors in person.

Amazon also announced plans to launch a new after-sales department in China, providing localized support for Chinese vendors. Key logistics updates included:

• MCF (Multi-Channel Fulfillment) Upgrade – All sellers will soon be able to use Amazon FBA to fulfill orders from external platforms.

• Global Imports Program Expansion – Vendors can consolidate cross-border orders, accessing multiple international markets without separate accounts for each country.

A New Department in China

Rising tariffs are forcing Amazon to adjust its first-party (1P) operations.

In 2024, Amazon's first-party product sales reached $247 billion, accounting for 38.7% of total revenue. These sales rely heavily on Amazon vendors, who supply products at wholesale prices for Amazon to resell.

However, U.S. tariffs on Chinese imports have significantly increased costs, hitting Amazon harder than its competitors.

A Morgan Stanley report highlights that 25% of 1P inventory costs stem from Chinese imports, with two-thirds of non-food grocery and consumer goods inventory expenses tied to China, making Amazon particularly vulnerable.

To address these challenges, Amazon is intensifying vendor support in China.

During its recent meetings with vendors in Shenzhen and Shanghai, the company announced the formation of a local service team. This team will assist Chinese vendors with persistent issues such as unresponsive Vendor Managers, billing errors, and logistics bottlenecks.

Amazon is also expanding communication tools for vendors. Previously, only select sellers could contact Amazon through email or Vendor Central (VC) Center. Now, these channels are available to all vendors, providing a more direct and accessible way to resolve issues.

Additionally, a chatbot has been introduced to handle routine inquiries, such as order tracking or account updates, reducing the strain on human support teams.

These measures aim to fortify Amazon's 1P supply chain and improve seller relations as the company braces for rising costs. By addressing seller pain points and strengthening communication, Amazon hopes to maintain its competitive edge while navigating the financial pressures of tariffs.

Single Account, Global Reach

Under the strain of rising tariffs, Chinese Amazon sellers are expanding beyond the U.S. market, eyeing global opportunities.

One seller told Brands Factory that he recently sent a team to Tokyo to attend Amazon Japan's VC acquistion event, aiming to meet with Vendor Managers and establish a foothold in the Japanese market. Many Chinese sellers are no longer satisfied with focusing solely on the U.S. and are actively pursuing VC access in other countries.

During the recent internal meeting, Amazon revealed a game-changing initiative: sellers may soon use a single VC account to sell globally. This is part of the Global Imports Program, which allows vendors to deliver goods domestically while Amazon handles international sales and distribution.

Amazon explained that the Global Imports Program is designed to help vendors reach global customers at minimal cost by leveraging its supply chain. A global team based in Seattle, Mexico City, Dubai, and Sydney is already in place to support the program.

"Previously, VC accounts were limited to single marketplaces," one vendor said. "Now, having a U.S. VC account enables one-click access to all regions—entering any country becomes seamless."

The program consolidates cross-border demand into a single purchase order. Vendors ship domestically, and Amazon takes charge of transporting goods to fulfillment centers worldwide. This eliminates the need for multiple VC accounts and helps vendors optimize production by meeting minimum order quantities.

Eligible marketplaces include the U.S., EU, U.K., Canada, UAE, Saudi Arabia, Australia, Mexico, Japan, and more. In China, Amazon's receiving hubs cover key ports like Shanghai, Shenzhen, Ningbo, and Xiamen.

Additionally, Amazon announced the expansion of its Fulfillment by Amazon (FBA) service for multi-channel sellers, enabling them to use FBA for orders placed on non-Amazon platforms.

Tighter Rules

Meanwhile, Amazon is tightening access to its VC program, prioritizing high-value sellers and stricter compliance.

Last year, the company terminated many VC accounts, particularly with annual sales between $1 million and $5 million. The move reflects Amazon's effort to reallocate resources to more competitive vendors. "Every VC category is saturated," said an Amazon spokesperson.

The crackdown hasn't spared even top-tier sellers. One attendee who joined Shenzhen meeting mentioned that a leading Chinese vendor lost their account just because another vendor outperformed them.

Once an account is closed, reactivation appears nearly impossible. "A vendor at the meeting attempted to recover their account but failed. Competition in this space is very intense," the attendee reported.

Securing a new account has also become increasingly difficult. "Internal recommendations are the only way, and these are limited. Vendor need strong sales, deep collaboration with Amazon, and significant MCF usage to stand out."

Amazon is also focusing on expanding into new product categories. During the meeting, the company outlined plans to grow in areas such as perishable food and liquid cleaning products for the European market.

At the same time, compliance for vendors has become more demanding. Amazon now enforces stricter rules on product documentation, packaging, and logistics. "Small errors, like omitting 'China' in an address, can lead to rejected reports. Packaging, shipping times, and delivery efficiency are also under close scrutiny," one vendor shared with Brands Factory.

TikTok Shop USA saw its gross merchandise value (GMV) jump 47.04% in March to $1.044 billion, averaging $33.69 million in daily sales. This marks the platform's first month of growth since November 2024, ending a three-month slump.

According to data from Kalodata, the top 10 product categories generated $754.79 million in GMV—up 48.74% from February. Beauty & Personal Care (19.03%), Womenswear & Underwear (12.8%), and Health (7.5%) together accounted for 39.38% of total GMV, collectively rising 2.19% month-over-month.

Category Analysis

While the top 10 categories remained unchanged from February, their rankings shifted, and all saw GMV growth of at least 3.31%. Notably, eight out of the ten recorded growth rates exceeding 40%.

Sports & Outdoor and Food & Beverages led the charge in March, with GMV rising 62.81% and 61.97%, respectively. These gains pushed them up to 4th and 5th place in category rankings. Womenswear & Underwear and Beauty & Personal Care also saw impressive growth—up 59.13% and 58.28%, respectively—retaining their positions as the top two categories.

March also brought noticeable changes in best-selling products and a sharp increase in the average price of top items. In February, the top 7 items ranged in price from $9.57 to $34.93. By March, that range had jumped to $26.94 to $82.46.

Newcomers to the top three best-sellers included Brainista's Yerba Mate Instant Tea Powder (Food & Beverages) with $3.75 million in revenue, medicube's Glow Skincare Set (Beauty & Personal Care) with $3.19 million, and Drink Nello's Calming Drink Mix (Food & Beverages) with $2.55 million.

Two of the top three best-sellers are functional drinks—highlighting the rapid growth of the functional food and beverage market. As consumers shift from basic nutrition to products that support mood, sleep, and stress relief, these once niche items are becoming everyday essentials, especially in Europe and the U.S.

Rising health awareness is fueling demand for supplements, herbal drinks, and functional teas, with innovative formulas and sharp branding helping new products stand out.

Vendors Spotlight

March brought heightened competition among TikTok Shop USA's top sellers, with new players from emerging categories shaking up the leaderboard. After falling off the list in February—ending a 12-month streak in the rank—Halara US made a comeback.

Tarte Cosmetics (Beauty & Personal Care) soared to the top spot, with sales jumping 94.8% from $4.23 million in February to $8.24 million in March, climbing from 3rd to 1st place. The surge was largely driven by two products: its undereye corrector ($1.37 million in sales at $30) and the paw brush ($1.33 million at $24.94). The brush was already a fan favorite, but Tarte sweetened the deal—offering it free with every purchase of the corrector.

Another notable shift in March was Crocs (Shoes) breaking into the top three sellers with $5.94 million in sales—the first time a footwear brand has made the list. Rather than relying on a single hit product, Crocs saw strong, balanced performance across its range, with all of its top three best-sellers being sandals, likely boosted by the approaching summer season.

Drink Nello (Food & Beverages) also made its debut, generating $4.38 million in sales. Following a strategy similar to Goli Nutrition—an established top seller—Drink Nello listed the same product under multiple links with tiered pricing. The brand's average unit price, starting at $35.63, stands out as notably higher than the category norm.

Another newcomer, Brainista (Food & Beverages), made a strong debut with $3.76 million in sales, driven by demand for its Yerba Mate Instant Tea Powder.

Yerba mate—a traditional South American tea known for its bold, smoky flavor and health benefits—has gained global popularity, especially in North America, Europe, and Japan. Brainista's version blends yerba mate with chicory inulin, probiotics, and prebiotic fiber to support gut health, along with Hericium erinaceus and L-theanine to reduce stress, improve sleep, and boost focus—aligning with growing wellness trends in Western markets.

To appeal to younger consumers, especially in Europe and the U.S., Brainista addressed yerba mate's typically bitter taste by introducing a peach mango flavor. Its instant format also adds convenience for busy lifestyles, making it ideal for use at the office, gym, or while traveling.

The Joybuy app, linked to JD accounts, offers global brands in home goods, snacks, pet products, and cosmetics. London users get JD’s hallmark logistics: same-day or next-day delivery, free shipping, easy 30-day returns, and steep first-time discounts.

Alibaba, Pinduoduo, and JD.com have long dominated China’s e-commerce scene. While Alibaba and Pinduoduo have aggressively pushed overseas—especially through Temu—JD has stayed largely quiet. The launch of Joybuy marks JD’s return to the global arena and signals fiercer competition among China’s e-commerce giants abroad.

Launched in 2015 as JD’s cross-border answer to AliExpress, Joybuy debuted alongside JD Indonesia, marking the start of its overseas expansion. But after weak international results and public criticism from founder Liu Qiangdong in 2019, Joybuy shut its B2C business in late 2021, rebranding as JD Global Trade to focus on B2B.

In recent years, JD has refocused on globalizing its supply chain by replicating its domestic “product-logistics-service” model abroad—most notably through rapid logistics expansion.

Since revamping its strategy in 2023, JD Logistics has aggressively scaled its global network of warehouses, delivery routes, and air freight. It aims to double overseas storage capacity by 2025, with new international lanes, expanded air cargo, and smart logistics tech, including automated warehouses and robotic delivery in Europe.

A key example is Ochama, launched in the Netherlands in 2022, now serving 24 countries with over 800 pickup points and 1,000 smart lockers.

As of mid-2024, JD Logistics operated nearly 100 bonded, direct-shipping, and overseas warehouses worldwide, covering 1 million square meters and reaching markets like the U.S., Germany, Vietnam, the UAE, and Australia.

In December 2024, the company outlined its 2025 global supply chain vision, aiming to integrate warehousing, delivery, and aviation networks to better serve international customers and cross-border merchants.

JD is also investing in brand visibility, adding UEFA Super Cup, Futsal Champions League, and Youth League deals to its UEFA Champions League sponsorship. Hiring in Europe has ramped up as well, with roles spanning wholesale, B2B ops, logistics, customer service, and platform management.

Sellers in China viewed the first phase of Amazon Haul as selective and difficult to access. With the latest round of invitations, expectations are rising that Amazon may ease restrictions and onboard a broader group of merchants

Growing Bet on China Sellers

Amazon Haul began quietly in June 2024, starting with a series of private meetings for a select group of Chinese sellers. The company didn't make a public announcement but instead worked behind the scenes, handpicking merchants it believed could compete on cost and speed. By November 13, 2024, the platform officially entered beta testing.

Sellers participating in Haul ship their goods to an Amazon-operated FBA warehouse in Dongguan, China. From there, Amazon handles storage, order fulfillment, and final delivery to customers—streamlining logistics for sellers while maintaining control over the customer experience.

According to Dai Jingfei, Vice President of Amazon China and Head of Asia Pacific, the first cohort of sellers had to meet three key requirements: they needed to be existing Amazon sellers, offer competitive pricing and a strong product mix, and be open to collaborating on process improvements during the early stages of the program.

One turning point came during Black Friday 2024. Amazon permitted Haul listings to share rankings with its main marketplace, a move that redirected some traffic but significantly boosted exposure for participating sellers. While the Haul model offers slimmer profit margins, many sellers reported that the spike in order volume more than made up for it—transforming what might have been a low-margin experiment into a high-volume success story.

Amazon Haul Gears Up for Global Growth

In February, the company quietly posted jobs for two key roles on the Haul team—a Software Development Engineer and a Senior Product Manager—both with a global remit. One listing signaled interest in Mexico, while CNBC later confirmed that Haul's rollout in Europe is slated for late 2025.

Then, on March 2, The Information reported that CEO Andy Jassy had elevated Haul to a top-tier priority. His executive team is now managing Haul with explicit growth targets—using it as a vehicle to reach price-sensitive customers at scale, both in the U.S. and abroad.

That strategy is already showing up in operations. During the Big Spring Sale, Haul offered up to 50% off on budget items priced under $20. Many were under $10, and some as low as $1. U.S. shoppers got free shipping on $25+ orders and instant discounts at checkout.

Behind the scenes, Amazon is optimizing the experience: faster cart tools, infinite scroll, and better product discovery. The result? According to Marketplace Pulse, Haul's best-sellers jumped 55% between November and January.

The message is clear: Haul is no longer a test. It's a roadmap.

TikTok Shop USA's gross merchandise value (GMV) fell 10.38% in February to $710.21 million, with daily sales averaging $25.36 million. The decline follows the post-Chinese New Year slowdown and continued store closures since January.

Since January, TikTok Shop USA has intensified its crackdown on noncompliant stores, targeting inconsistencies in registration, fraudulent information, and multi-IP associations. New stores and multi-account sellers have been hit hardest.

Data from Kalodata revealed that the top 10 categories generated $507.47 million in GMV, down 8.3% from January. Beauty & Personal Care (17.68%), Womenswear & Underwear (11.83%), and Health (7.68%) accounted for 37.19% of total GMV, slipping 1.84% month-over-month.

Category Analysis

In February, TikTok Shop's top 10 categories remained largely stable, with Collectibles as the only new entrant. The market slowdown, which began in December 2024, deepened in January as all categories saw declines. While the downward trend continued into February, the losses were less severe than in the previous month.

In January, Phones & Electronics and Home Supplies saw the steepest drops, falling 46.97% and 35.52%, respectively. Fashion Accessories and Menswear & Underwear also posted sharp declines of 33.04% and 32.33%.

By February, the hardest-hit categories shifted, with Sports & Outdoor and Phones & Electronics leading losses at 22.72% and 20.08%. Meanwhile, Household Appliances recorded the smallest decline at just 1.07%. Health performed relatively well, slipping 4.8% but climbing from 4th to 3rd place.

February saw notable shake-ups in best-selling products. Wavytalk's Hair Brush (Beauty & Personal Care) and Zoyava's Soothe & Smooth Bundle (Health), both on the list for at least two consecutive months, dropped off the rankings.

Meanwhile, The Lost Skills' Herbal Remedies (Collectibles) held the top spot despite a revenue drop to $2.27 million from $3.35 million in January. EVIL GOODS' Honey Balm (Beauty & Personal Care) climbed to second place, even as sales dipped from $1.96 million in January to $1.86 million.

Vendors Spotlight

February saw intensified competition among TikTok Shop USA's top sellers, with five new entrants from five different categories shaking up the rankings. Notably, Halara US, which had held the top spot for 12 consecutive months, dropped off the list entirely.

Goli Nutrition (Health) claimed the No. 1 position with $5.22 million in monthly sales. As a consistent top performer, the brand has occupied its space in the rankings for seven straight months since August, fueled by its Ashwagandha & Vitamin D Gummies.

To maximize sales, Goli Nutrition strategically listed the product under three different links: a single bottle at an average price of $13.72, a three-pack at $30.20, and a six-pack at $48.91—bringing in a total of $33.88 million over the past 180 days.

In 2024, the global gardening equipment market size was estimated at $96.86 billion, with North America leading at 35.3%. March to May marks peak gardening season in the region, driving demand for tools, seeds, and fertilizers. Historically, U.S. horticultural sales rise from February, peak in May and June, and remain strong through Q3.

With North America's peak gardening season approaching, horticultural sales are climbing. VEVOR, a Chinese MRO tools brand, reenter the top seller rankings at No. 6 with $3.3 million in sales after a two-month absence. In the Garden Supplies subcategory, VEVOR claimed two of the top five bestsellers, with notably high average unit prices.

Another key development is the entry of meccaofsc (Collectibles) into the top 10 sellers with $3.13 million in sales. The sports card market has been gaining traction on TikTok Shop, driven by nostalgia and collectible trends. Over the past 30 days (Feb 2–Mar 3), the Collectibles category generated $53.7 million in sales, with its sub-category Trading Cards & Accessories dominating at $43.73 million—81.43% of the total—growing 18.72% month-over-month.

Another newcomer, Bella All Natural (Food & Beverages), debuted with $2.68 million in sales. Mirroring Goli Nutrition's strategy, one of its best-sellings Probiotics Iced Coffee leveraged tiered pricing across single, two-pack, and three-pack listings.

In January 2025, TikTok Shop USA saw a 31.48% drop in gross merchandise value (GMV), totaling $792.5 million, with daily sales averaging $25.57 million. This decline followed the end of the holiday season and was further impacted by a temporary TikTok ban on January 19, as it still remains unavailable for new users to download from the Apple and Google app stores in the United States.

Data from Kalodata revealed that the top 10 categories generated $553.4 million in GMV, a 23.7% drop from December 2024. Beauty & Personal Care (18.62%), Womenswear & Underwear (12.58%), and Sports & Outdoor (7.83%) accounted for nearly 40% of total GMV, with their combined share rising by 5.18%.

Category Analysis

January's rankings saw a shift, with Food & Beverage and Household Appliances replacing Kitchenware and Toys & Hobbies among the top 10 categories. While December 2024 already showed signs of a slowdown across key categories, January's performance worsened, with all categories declining.

Phones & Electronics and Home Supplies experienced the largest drops, down 46.97% and 35.52%, respectively. Fashion Accessories and Menswear & Underwear also saw substantial declines, down 33.04% and 32.33%.

In contrast, Health posted the smallest decline at just 1.56%, rising to 4th place from 5th. Sports & Outdoor also performed relatively well, down 17.36% but climbing from 4th to 3rd place.

Top-selling products also shifted, with Beauty-Life's Electric Massager, once a consistent best-seller, falling off the rankings entirely. Meanwhile, The Lost Skills' Herbal Remedies surged to the top, with $3.35 million in revenue, up from $2.84 millions in December despite the overall downturn.

Vendors Spotlight

In January 2025, three new brands made their way into the top 10 TikTok Shop sellers: MaryRuth's (Health), Reus Research (Health), and Fitnessathome (Sports & Outdoor), signaling a growing focus on health among TikTok users.

MaryRuth's surged from outside the rankings to 4th place, with $5.3 million in monthly sales. Its standout product, the Liquid Multivitamin for Hair Growth, ranked 2nd overall on TikTok Shop USA in January. The product's two sizes—450ml for $31.46 and 880ml for $53.13—combined for over 105,000 units sold, generating $3.73 million in revenue.

Reus Research entered the top 10 with $3.85 million in sales, driven by its only product NAD+ Supplement for Skin Aging, Energy, and Focus, priced at $39.99.

Influencer-driven marketing, particularly from mid-tier creators with 30k to 60k followers, played a key role in its success.

Fitnessathome also made its debut, fueled by a diverse range of home fitness tools, averaging $38.72 per unit. The brand replaced last month's MERACH, a fast-fat-burning home fitness brand.

What is still worth emphasizing in the end is health-focused brands dominated the top 10, with even The Lost Skills, a collectibles shop, finding success with its Herbal Remedies book—a product that taps into the growing health-conscious trend alongside Fitnessathome's offerings.

In December 2024, TikTok Shop USA generated $1.16 billion in gross merchandise value (GMV), a 3% month-over-month decline. Average daily sales were $37.31 million. The downturn followed the conclusion of Black Friday and Cyber Monday sales, with early December's Cyber Monday driving the highest GMV.

Kalodata data showed the top 10 categories generated $725.02 million in GMV, a slight 0.05% drop from November. Beauty & Personal Care (16.5%), Womenswear & Underwear (10.67%), and Phones & Electronics (6.68%) made up 33.85% of total GMV, though their combined share fell by 0.07%.

Category Analysis

In December, TikTok Shop's top 10 categories remained stable, with Kitchenware replacing Food & Beverage in the rankings.

Unlike November's broad growth, December saw declines in nearly half of the top 10 categories as holiday sales tapered off. Health and Beauty & Personal Care posted the largest month-over-month drops, down 9.42% and 7.60%, respectively.

Fashion Accessories led growth with a 22.94% increase, followed by modest gains in Toys & Hobbies (7.82%) and Menswear & Underwear (8.62%). After a 66.82% surge in November, Phones & Electronics held steady in third place, rising 4.59%.

The top products also shifted. Beauty-Life's Electric Massager and Wavytalk's Hair Brush remained strong performers, while The Lost Skills' Herbal Remedies and Zoyava's Supplement made their first appearances in the top three.

Vendors Spotlight

The top 10 TikTok Shop sellers saw four new entrants in December, signaling heightened competition.

Comfrt (Womenswear & Underwear) debuted in the top five, with $5.43 million in monthly sales. Growth was driven by a balanced product range, including hoodies and sweatpants, with an average unit price above $50.

Merach Fitness (Sports & Outdoor) also entered the top 10, fueled by strong demand for its Vibration Plate Exercise Machine, which sold 32.7k units, generating $2.43 million—over half of its monthly revenue.

MERACH is a home fitness brand that focuses on fast fat burning. As a partner of the China National Sports Training Center, MERACH exclusively provides treadmills, spinning bikes, elliptical trainers, rowing machines and massage guns to the national team athletes to prepare for Olympic and other big events.

Other notable debuts included The Lost Skills (Collectibles) and Fanttik (Automotive & Motorcycle), showcasing TikTok Shop's expanding product categories beyond beauty and fashion.

The Lost Skills saw significant growth from its best-selling Herbal Remedies book, with 86.7k units sold, generating $2.84 million. The book's promotional video below on TikTok has racked up 6.6 million views.

And Fanttik ranked among TikTok Shop USA's top 10 sellers with $4.28 million in sales in December. As tools brands gain traction, Fanttik joins the ranks of top performers, following in the footsteps of VEVOR, which made the top 10 in recent months.

Founded in 2020, Fanttik specializes in high-quality and modern automotive tools, with several of its products winning the prestigious "IF DESIGN AWARD." In 2023, Fanttik formed a strategic partnership with Costco, expanding its reach in North American retail.

Before the holiday season, Anker's two official Temu U.S. stores suddenly suspended all operations, displaying a "temporarily closed" status. According to The Information, Amazon allegedly issued warnings to its top 20 brands operating on both platforms, raising concerns about potential exclusivity demands.

Amazon denied the allegations, asserting that it does not require sellers to choose between platforms. By December 28, Anker's Temu U.S. stores resumed operations, albeit with a limited selection of products. The incident has drawn significant attention and may impact how major Chinese sellers perceive Temu as a rival to Amazon.

Anker Pulls Out of Temu — Strategic or Forced?

Anker, a major Amazon seller, made its debut on Temu in June 2024, launching two U.S. stores: "ANKER Certified Refurbished Official Shop" for refurbished goods and "ANKER Official Shop" for new items.

These stores followed a semi-managed model, with Anker handling logistics while Temu controlled pricing. On Amazon, by contrast, Anker sets its own prices, which are generally higher—an Anker power bank, for instance, sold for $40 on Amazon in October 2024 but only $25 on Temu.

In December 2024, Anker's products were unexpectedly removed from its Temu U.S. stores, though its Temu Germany store, ANKER EU, remained operational with 19 prominently ranked items. Reports surfaced that Amazon was pressuring Chinese sellers to "choose one platform," sparking debates over exclusivity demands.

Opinions on Anker's withdrawal are mixed. Some attribute it to Amazon's influence, while others see it as a strategic move to protect brand value. Another theory suggests Anker was merely testing Temu's platform and pricing strategies.

The incident drew attention, prompting Amazon to clarify on December 25 that sellers are free to determine their sales and pricing strategies across platforms. By December 28, Anker's Temu U.S. stores had partially reopened, with limited products available.

Meanwhile, rival Ugreen is rumored to be considering a departure from Temu. Although its Temu U.S. store remains open, the number of its listed products has dropped to just three.

Temu Gains Ground, but Amazon Holds the Power

Amazon and Temu's competition has hit a critical point as the two platforms vie for dominance in the e-commerce space.

In November 2024, Amazon introduced "Haul," a section for affordable products priced under $20, aiming to counter competitors like Temu, Shein, and TikTok. Initially limited to 300 sellers, Haul is expected to expand and eventually become available to all sellers.

Temu, on the other hand, has aggressively pursued Amazon's top Chinese sellers based in Shenzhen, relocating its recruitment team there in 2024. Sellers like Anker, Sailvan Times, and Loctek have joined Temu, with some reporting strong revenue growth—Sailvan Times earned RMB 60.63 million (USD 8.31 million) in the first half of 2024, while Huakai Yibai made RMB 91.58 million (USD 12.55 million) in the third quarter.

In a bold move, Temu recruiters distributed promotional materials outside Amazon's Asia-Pacific Innovation Center launch event in November 2024.

Meanwhile, Amazon's retaliation is becoming increasingly aggressive.

A few Chinese top are reportedly exiting Temu, with some sellers claiming their product links on Amazon have disappeared. According to The Information, Amazon has been accused of using price-scraping tools to monitor competitors and divert traffic from products priced lower on Temu, increasing pressure on sellers.

The accusations come as Amazon faces ongoing scrutiny for its pricing practices, which have previously been the subject of antitrust probes. In China, the "Either-Or" policy remains a contentious issue. On December 29, 2023, a court ruled that Alibaba had abused its market dominance by forcing exclusivity on sellers, ordering it to pay JD.com RMB 1 billion (USD 137 million) in compensation.

Amazon swiftly denied any "Either-Or" practice and asserted that sellers are free to set pricing and sales strategies across platforms.

"The company emphasizes its support for sellers with solutions like Multi-Channel Fulfillment (MCF) to help them succeed on any platform."

Still, even without formal "choose one platform" policies, Amazon is expected to exert influence on Chinese sellers to maintain its dominance. While Chinese sellers may drop Temu, abandoning Amazon is out of the question—that's Temu's Achilles' heel.

In November 2024, TikTok Shop USA set a new record with $1.2 billion in gross merchandise value (GMV), a 51% month-over-month surge. Average daily sales reached $39.92 million, with the final four days of November (Nov. 27–30) driving $311.46 million in sales—averaging $77.87 million per day. Notably, Black Friday 2024, which fell on November 29th, contributed significantly to this spike in sales.

Data from Kalodata reveals that TikTok Shop's top 10 categories generated $725.37 million in GMV, reflecting a 31.5% increase from October. The leading three categories—Beauty & Personal Care (17.24%), Womenswear & Underwear (10.52%), and Phones & Electronics (6.17%)—accounted for 33.92% of the platform's total GMV, although the share dropped by 5.37% from October.

Category Analysis

In November, TikTok Shop's top 10 categories remained consistent, despite some shifts in ranking. Like October, November saw robust growth across all categories, with GMV rising by at least 12.57%. And the surge in November was even more pronounced than the previous month.

Fashion Accessories and Collectibles led the growth in October, posting month-over-month increases of 25.52% and 26.05%, respectively. In November, it was Phones & Electronics that surged ahead, up 66.82%, marking its debut in the top three. Home Supplies and Fashion Accessories also saw strong gains, rising 45.08% and 45.02%, respectively.

Meanwhile, Beauty & Personal Care and Sports & Outdoor, despite the high GMV in October, continued their impressive growth in November, with increases of 40.48% and 40.54%.

Top-performing products continued to include Goli Nutrition's Ashwagandha & Vitamin D Gummies (Health) and Beauty-Life's Electric Massager (Beauty & Personal Care). Additionally, Transpeed's Magcubic Portable Projector (Phones & Electronics) made its first appearance in the top five.

Vendors Spotlight

The top 10 TikTok Shop sellers remained largely unchanged in terms of overall shop presence, with only three new entrants marking their debut. However, there were significant shifts in the rankings, signaling fierce competition in the marketplace.

Tarte Cosmetics (Beauty & Personal Care) surged to the top spot, posting a massive 241.95% increase in monthly sales—from $4.1 million in October to $14.02 million in November. This leap elevated Tarte from 3rd place to 1st. Plus, this growth wasn't driven by any single product; instead, sales were balanced across Tarte's product range, with its top three products each generating $1 million in revenue.

Another standout performer, MRO tools brand VEVOR, made an impressive climb to 4th place with $5.99 million in sales, marking a robust 82.07% increase from October. VEVOR's rise was also driven by balanced sales across multiple items, with 1,579 products listed in its shop. In contrast, Tarte Cosmetics and Goli Nutrition (ranked 2nd) only offer 201 and 31 items, respectively, highlighting the strength of VEVOR's diverse product catalog.

Another noteworthy development is the entry of MINISO.US into the top 10 sellers. While the brand is known for lifestyle and consumer goods, MINISO's TikTok Shop focuses primarily on headphones and earphones, with its top three products each generating $1 million in revenue.

Faced with mounting competition, sluggish growth, and delayed IPO plans, SHEIN's leadership made a strategic pivot. The company stepped back from competing directly with Temu, instead centering its efforts on branded fashion products and strengthening collaborations with external merchants to sustain growth.

During recent investor meetings in London and the U.S., SHEIN executives forecasted that revenue growth would stabilize at 20% to 30%, with net profit margins expected to reach mid-to-high single digits.

The Struggles Behind SHEIN Marketplace Expansion

SHEIN has taken two major steps to advance its marketplace strategy. In May 2023, it launched SHEIN Marketplace, adopting Amazon's approach to attract brand merchants. By May 2024, it introduced a semi-managed model, allowing sellers with overseas warehouses to manage logistics and customer service while SHEIN handled pricing and operations.

Initially targeting young women with trendy fashion, beauty products, and accessories at affordable prices, SHEIN's marketplace strategy has enabled it to broaden its offerings. According to a third-party seller, items like kitchen appliances, vanity tables, sofas, and drawer cabinets have been performing well, catering to the wider lifestyle needs of female shoppers.

By expanding its product categories and ramping up its marketplace efforts, SHEIN has entered a highly competitive space. It now faces strong rivals like TikTok Shop and Temu, which benefit from greater traffic and marketing resources. In North America, Amazon's continued dominance only heightens the pressure.

By September 2023, Temu's U.S. GMV had nearly caught up with SHEIN's, according to LatePost, further intensifying competition. In response, SHEIN has shifted focus to increasing its share of non-fashion categories, which now account for roughly 40% of sales, up from less than 20% last year.

Expanding its marketplace has required heavy investment from SHEIN. Moving beyond its efficient "small order, fast return" model for domestic factories, the company now offers enhanced incentives to third-party sellers. Through its semi-managed model, SHEIN eliminates commission fees and deposits, pricing goods at 85% of Amazon's rates to ensure sellers remain profitable.

According to a source familiar with SHEIN Marketplace, sellers incur considerable hidden costs. The platform assigns two operational teams to each seller and funds marketing efforts on external platforms. To support profitability while maintaining competitive pricing, SHEIN charges a modest 10% commission.

SHEIN's increasing investments in its marketplace and commission model are affecting its revenue. Meanwhile, surging air freight and marketing costs are adding more pressure on profit margins.

Amid increasing competition among the "big four" cross-border e-commerce platforms—SHEIN, AliExpress, Temu, and TikTok Shop—advertising and shipping costs have risen sharply, according to a SHEIN employee. "SHEIN's shipping costs have roughly doubled since 2020," the employee noted.

Despite heavy investments, SHEIN's performance is under pressure. Data from SEMrush shows a sharp decline in user traffic, with monthly visitors dropping from 250 million in March 2024 to 190 million in July—a 24% decrease over just four months.

Refocuses on Fashion

SHEIN's push into the marketplace model has faced setbacks. Although the company acquired several brands in 2023 to broaden its product range, progress has lagged behind expectations. The main challenge is not only growing competition but also a lack of branding and customer loyalty, as SHEIN's strengths in supply chain management don't fully translate into marketplace success.

Confronted by rising competition, sluggish growth, and IPO delays, SHEIN has reoriented its strategy. With IPO plans delayed, the company has decided to step away from directly competing with Temu and instead return to its core focus: fashion. The new plan prioritizes branded apparel and fashion items while continuing to expand third-party partnerships on its marketplace.

Since mid-year, SHEIN has intensified its focus on fashion through its various models, including SHEIN Marketplace and its fully- and semi-managed frameworks.

Recently, the company revamped its fully-managed model by granting third-party sellers free access to overseas warehouses in Europe and North America. Previously, domestic sellers had to store inventory in SHEIN's domestic warehouses, with international shipping triggered only after orders were placed—a process that caused delays.

By allowing direct shipments to overseas warehouses, SHEIN has improved delivery times and logistics efficiency. With over 860,000 square meters of free warehouse space, the company is reducing storage and shipping costs for sellers, utilizing centralized and smart warehouses to cut expenses while optimizing overall logistics performance.

Recently, SHEIN has eased entry requirements to attract more sellers, even in key categories like men's and women's apparel. Factory size requirements, previously set at 1,000 or 800 square meters, have been relaxed, with policies now more flexible. This is part of SHEIN's strategy to tap into untapped factory resources and lure sellers from competitors, bolstering its supply chain.

Since August, SHEIN's semi-managed model has also evolved. Sellers of categories such as women's fashion, swimsuits, and wigs, previously exclusive to SHEIN's own brand, are now allowed to join the platform. The company has also removed the 400g weight limit for certain categories.

SHEIN Marketplace has pivoted toward fashion, prioritizing brand owners and large distributors with 1,000+ SKUs and the ability to source goods at lower prices.

SHEIN's return to fashion busines is designed to avoid direct clashes with competitors like TikTok Shop, Temu, and AliExpress. However, the company continues to face the challenge of striking a balance between promoting its in-house products and third-party brands, as well as managing traffic distribution.

In an internal email on November 21, CEO Eddie Wu revealed plans to merge its domestic and international e-commerce businesses into a single division. The new unit, led by Jiang Fan, combines major platforms like Taobao, Tmall, and Alibaba International Digital Commerce Group (AIDC). Jiang will report directly to Wu.

The new group will integrate Taobao, Tmall, 1688, Xianyu, and Alibaba International Digital Commerce Group (AIDC), forming a unified business entity covering both domestic and global markets.

This change reflects Alibaba's continued focus on its core business and Eddie Wu's strategic outlook on the future of e-commerce. "E-commerce in China and globally is entering a new era, where global supply chain, fulfillment, and consumer service capabilities will define future competition." Wu stated in the email.

Taobao Goes Global

Earlier this year, Alibaba took key steps to integrate its domestic and international e-commerce operations.

In March, the company implemented a policy allowing employees to transfer between groups, such as Taobao, Tmall, and AIDC, without losing seniority. The move aimed to improve collaboration across its e-commerce units.

In July, Taobao launched a free shipping program for fashion items through its "Taobao Overseas" feature, targeting regions like Singapore and Korea and focusing on overseas Chinese customers. By September, the initiative was expanded to cover all product categories.

Taobao Overseas is still in its early days, operating through a semi-managed model. Merchants are tasked with shipping products to domestic consolidation warehouses, creating overseas storefronts, writing product descriptions with the help of AI translation tools from Taobao, and managing pre-sale inquiries. The platform itself takes care of logistics and customs clearance.

This setup demonstrates deeper integration between Taobao and AIDC. Taobao focuses on supply and business development, while AIDC handles logistics and international consumer operations. Popular products from Taobao Overseas are also available on AliExpress and Lazada.

During this year's Double 11, Taobao used AIDC's overseas payment and logistics infrastructure, along with subsidized shipping, to expand free shipping zones to 10 countries. As a result, Taobao Overseas saw its new users double year-over-year, while sales of free-shipping products in Taobao Hong Kong jumped 600%.

Jiang's Comeback

Jiang Fan's return to Alibaba has drawn attention as well. Once seen as Jack Ma's successor, Jiang took on the role of AIDC CEO in 2020 after a scandal.

Over the past three years, He has introduced a "2+4" structure, with two cross-border platforms (AliExpress, Alibaba.com) and four localized platforms (Lazada, Miravia, Trendyol, Daraz). He also launched full-service, semi-managed, and self-operated models to increase flexibility and efficiency.

Under Jiang's leadership, Alibaba's strategy has become more focused. AliExpress now leads cross-border trade, while Lazada oversees localized e-commerce. Their commercial teams were integrated to prevent internal competition and improve collaboration. Lazada, after its largest-ever reorganization, posted its first monthly profit in 12 years.

The global e-commerce landscape is becoming increasingly competitive as Temu, SHEIN, and TikTok Shop expand aggressively. Alibaba, once a dominant player, is now lagging behind, though its international business has shown strong growth under Jiang Fan over the past three years.

In the third quarter, Alibaba's overseas revenue rose nearly 30% compared to the same period last year, more than twice the growth rate of its second-strongest segment, local services. International e-commerce now contributes 13.4% of the group’s total revenue, making it the second-largest segment after domestic e-commerce. However, this growth has been costly—losses for the division widened to 2.9 billion yuan ($400 million), over seven times the loss recorded in the same quarter last year.

This restructuring marks a critical moment for Alibaba. For the first time, the company has combined its domestic and international e-commerce operations under one leader.

In October 2024, TikTok Shop USA hit a record high of $793 million in GMV, a 14.6% increase from the previous month. Average daily sales rose to $25.6 million.

In October, the platform's top 10 categories collectively contributed $551.6 million in GMV, marking an 18.5% month-over-month increase.

Category rankings remained stable with minimal volatility, reflecting steady demand. The top three categories accounted for 39.29% of total GMV, led by Beauty & Personal Care at 18.54%, followed by Womenswear & Underwear at 13.87%, and Health at 6.88%.

Category Analysis

In contrast to September—when Phones & Electronics and Menswear & Underwear saw modest declines of 2.21% and 0.41% in GMV—October brought robust growth across all top 10 categories, with GMV at least rising by 10.3%.

Fashion Accessories and Collectibles led the surge, with month-over-month increases of 25.52% and 26.05%, respectively. The affordability of Fashion Accessories, with an average price of $9.24, likely fueled this growth by encouraging impulse purchases.

Phones & Electronics and Womenswear & Underwear also posted substantial gains, up 25.14% and 22.63%. Category rankings remained stable, reflecting broad-based growth across the board.

In October, Goli Nutrition's Ashwagandha & Vitamin D Gummies held two of the top three spots, while Beauty-Life's Electric Massager debuted in the top three, ranking second. Additionally, a household appliance product made its first appearance among the top five.

Vendors Spotlight

The strong presence of new entrants—now comprising half of the top-ranking sellers—highlights a rapidly evolving marketplace. While all categories recorded significant growth, the shop-level data suggests a rise in smaller and mid-sized sellers joining TikTok Shop, or perhaps a behind-the-scenes surge among existing shops.

This competitive landscape is especially evident in the ranks from three to ten, where GMV values are closely matched. Despite growth across the board, only Goli Nutrition, ranked first, and Halara US, ranked second, posted notable gains of 46.84% and 55.69%, respectively. In contrast, other established names such as Micro Ingredients and Wavytalk saw significant declines, alongside notable shifts in their rankings.

The GMV gap between the top-ranked and 10th-ranked sellers widened further, fueled by Goli Nutrition's outstanding performance. In September, Goli's monthly sales surged 154.03%, from $3.35 million to $8.51 million, elevating it from sixth to the top spot. October saw continued momentum, with sales rising another 46.84% to $12.5 million, firmly securing its lead.

This growth was primarily driven by the strong demand for Goli's Ashwagandha & Vitamin D Gummies, which held the top two spots on TikTok Shop USA's best-selling products list. The seller strategically listed the product under two links—one for a single bottle and another for a three-bottle pack—achieving a combined $21.98 million in sales since launch.

Another standout performer, Halara US (Womenswear & Underwear), rose to second place with $7.94 million in sales, marking a 55.69% increase from September. Notably, Halara's top three best-selling items have maintained strong sales for over a year, underscoring sustained consumer demand. Its top product, the High Waisted Training Leggings, launched in October last year, has reached 463,900 units sold, generating $14.52 million in total revenue.

Also notable is the debut of MRO vendor VEVOR in the top ten sellers. Since launching its TikTok Shop in the U.S. last September, VEVOR has achieved $19.12 million in sales with 309,180 units sold. Unlike other leading shops, which often rely on a few best-selling items, VEVOR's diverse product offerings are balanced across multiple categories, reflecting a more distributed sales strategy.

Alibaba has quietly introduced a new shopping app in Japan, named "TAO", according to a report from Yahoo Japan. The app's name is likely a nod to "TaoBao", indicating that it's part of the company's broader push to expand its overseas business.

The launch comes as Chinese e-commerce firms including Shein and Temu ramp up their presence in Japan, prompting Alibaba to enter the fray. With its vast inventory of goods and extensive merchant network, Alibaba is well-positioned to tap into Japa's growing market. Meanwhile, Alibaba's domestic platforms, Taobao and Tmall, face intensifying competition at home from rivals like JD.com, Pinduoduo, and content-driven platforms such as Douyin, Kuaishou, and Xiaohongshu.

Pinduoduo reported its first-quarter earnings for 2024 on May 23, with total revenue reaching $12.22 billion, a 131% increase year-over-year. Following the announcement, its stock surged, pushing its market cap to $204.3 billion, overtaking Alibaba to become the most valuable U.S.-listed Chinese e-commerce company, a position Alibaba had long held.

According to the JETRO's Global Trade and Investment Report 2024, Amazon ranks first among cross-border platforms with a 24% share, followed by Alibaba and AliExpress at 16%. Shein and Temu take third and fourth places, respectively. Temu was also the most downloaded shopping app globally in 2023.

So, who will TAO be up against in Japan? And who's most likely to feel the impact?

Rakuten and Yahoo! Japan Shopping are the top local platforms, joined by U.S.-based Amazon and China's Temu and Shein. Each of these platforms plays to its strengths: Rakuten focuses on making shopping more engaging, Amazon excels in fast delivery and simplicity, while Temu and Shein offer affordable pricing and a huge selection. Yahoo! Japan, on the other hand, relies heavily on traffic from social media and search.

TAO may not be ready to take on giants like Rakuten and Amazon in the Japanese market. For now, its best move could be to go for Temu's low prices and take a swing at Shein's fashion line.

According to a press release from Alibaba International Digital Commerce Group (AIDC):

TAO will leverage Taobao's strengths, offering quality products that match Japanese customers' tastes and preferences at affordable prices. TAO also offers an engaging shopping experience that uses vibrant visuals to create a desire to buy—more images, richer displays, similar to Rakuten's style—so Japanese users can shop with ease.

In March 2023, AIDC established Taobao Japan, with the goal of making TAO a trusted online marketplace firmly rooted in Japan.

Currently, TAO offers over 3 million products, spanning categories such as fashion and accessories, home furnishings, bedding and bath items, outdoor gear, pet supplies, kitchenware, and office supplies. Looking ahead, we plan to further expand our offerings in both number and variety.

TAO comes equipped with several features designed specifically for the Japanese market. Its website design and interface, crafted by well-known web/UI designer Ryoji Tanaka, are built to balance visual appeal with functionality. The app offers product recommendations based on different themes and scenarios, giving users a sense of discovery as they browse. It also includes social features, such as the ability to share favorite lists and interact with other users.

TAO partners with leading Japanese carriers like Yamato and Sagawa, to ensure secure and reliable deliveries. Customers also enjoy free returns within 40 days of purchase. Payment options are flexible, including credit cards, PayPay, convenience store payments, and Pay-easy, with safety protections in place.

First-time users get free shipping, and orders over 3,500 yen ($22.75) qualify for free shipping on subsequent purchases.

TAO also has a dedicated Japanese customer service team for app chat, hotline, and email to provide prompt support without time zone hassles.

From the announcements, several key points stand out:

• While TAO offers a wide range of products, apparel remains its primary focus for now. The platform emphasizes rich product information and leverages Taobao and Tmall's vast inventory, positioning itself for future expansion.

• TAO seems to have learned from Temu's challenges, enlisting a renowned designer for its overall website design and integrating PayPay, Japan's most popular mobile payment system. It also implemented a quick-response system to improve communication with users.

• First-time users enjoy free shipping, with free delivery on subsequent orders over 3,500 yen. This aligns with common practices on Japanese e-commerce platforms, and customers can return or exchange items for free within 40 days.

As of now, it remains unclear whether TAO will open its marketplace to third-party sellers. An official seller recruitment manager indicated that TAO is still in the early stages, with a relatively small recruitment team. Initially, TAO will primarily work with existing merchants on Tmall and Taobao, with plans to gradually bring in professional sellers and factories from Japan. In summary, the platform is just testing the waters for now.