The United States issued another "ban order" on TikToK, requiring it to separate from ByteDance within 165 days!

According to the latest data released by app analysis company AppMagic, TikTok's downloads on the App Store and Google Play Store reached 1 billion times in 2023, far ahead of other competitors and becoming the most downloaded application last year.

TikTok has been downloaded 5.17 billion times since its launch in 2016. With the rapid growth of traffic, TikTok has become a "hot topic" in the eyes of social media users, advertisers and brands.

But as the saying goes, a tall tree attracts the wind. As TikTok soars, it is always being pursued and blocked by governments around the world. Just recently, the "claws of the ban" from the United States reached out to it again.

The controversy surrounding the ban on TikTok is still intensifying overseas.

Last March, a hearing on TikTok caused an uproar, with CEO Zhou Shouzi being questioned for five hours in the U.S. Congress. In November, the governor of Montana also signed a TikTok ban, which TikTok eventually won on the grounds of unconstitutionality.

However, a new storm is brewing again. On March 5, local time, bipartisan members of the U.S. Congress proposed a bill requiring ByteDance to divest its short video app TikTok, otherwise major app stores will be banned from listing TikTok.

According to Reuters, the bill requires ByteDance to divest its control of TikTok within 165 days and establish relevant procedures to regulate social media applications from foreign companies. The initiator claims that the main purpose of the bill is to address the "national security concerns" brought by TikTok, and a preliminary vote is expected on March 7.

▲ The picture comes from TikTok

TikTok spokesperson Alex Haurek responded with a statement: “No matter how the sponsors disguise it, this bill is an outright ban on TikTok. This legislation will trample on the First Amendment rights of 170 million Americans and deprive 5 million small businesses of the platform they rely on to grow and create jobs.”

It is understood that the new bill to separate TikTok from ByteDance has been supported by the White House. A spokesperson said it will ensure that the ownership of TikTok is not in the hands of entities that may pose a threat to the country.

Currently, the White House is discussing the specific implementation content of the bill with lawmakers from both parties to ensure that it has a solid legal basis.

Although it is not yet confirmed whether the bill will be implemented, if it is implemented, it will inevitably have a significant adverse impact on TikTok's business in the United States.

Affected by the geopolitical crisis, TikToK has been committed to increasing its e-commerce business in the past two years, improving its risk resistance and building a stronger competitive barrier.

▲ The picture comes from TikTok

In 2023, facing regulatory pressure from multiple parties, TikToK continued to accelerate the advancement of e-commerce: fully opening small stores in the United States, closing semi-closed-loop businesses, and launching full hosting services for cross-border sellers. It is reported that TikTok plans to expand the scale of its US e-commerce business by 10 times, with a target GMV of US$17.5 billion in 2024.

I still remember that in October last year, TikToK suffered a heavy blow in Indonesia and was forced to divest its e-commerce business and return to its traditional and "pure" social platform. It later made a comeback by cooperating with the local e-commerce platform Tokopedia. However, the US ban on TikTok this time is to ban the entire APP, which means that all businesses including e-commerce will face a devastating blow.

For TikTok, whose e-commerce business in the United States is booming, the new bill is like a roadblock that has appeared out of thin air. However, the bill has not yet been implemented, and nothing is certain.

It is learned that, thanks to a series of e-commerce initiatives and the huge native traffic pool, TikToKShop's US business is currently booming. Especially after the US site was officially opened to entry in the second half of the year, the number of small stores increased dozens of times, and the monthly GMV reached nearly US$500 million as of November.

However, according to Sensor Tower data, TikTok's monthly active user growth rate has dropped from 12% in 2022 to 3% in 2023, and is expected to slow further to 5.4% in 2024. Research institutions believe that TikTok's investment in the e-commerce field has mainly affected the momentum of user growth.

Other foreign media reported that many users complained that TikTok's emphasis on e-commerce has turned it from a social application into a "wasteland full of advertisements." The low-quality and counterfeit goods that are rampant on TikTok stores have also deterred some users.

Faced with the "pessimistic" comments from many parties, some sellers bluntly said that "new regulations will probably be introduced to restrict the platform." The introduction of the new bill has, to some extent, fulfilled the sellers' predictions.

The implementation of the TikTok ban is still unclear. But what is clear is that under the heavy pressure of regulation, TikTok is trying to seek a shelter by continuing to increase its e-commerce business.

▲ The picture comes from TikTok

Although 2023 is a year of ill-fated TikTok, it is also the year when TikToK e-commerce enters the fast lane of development, and many TikTok merchants are deeply touched by this.

Many sellers have reported that the platform is currently experiencing a growth dividend period, with a relatively broad incremental space, and the strong traffic provides extremely fertile soil for the start-up of stores. Moreover, the interest e-commerce model led by TikToK is different from Amazon's traditional third-party model in terms of track. It can not only provide more diversified sales channels, but also serve as a drainage channel for Amazon stores to a certain extent.

A seller who has just joined the market said: "The effect is quite good. It has just been a week since the start of sales. Currently, one product is selling well, with more than 100 orders a day. The advertising production can reach more than 4. And it can also greatly drive the increase of traffic on Amazon."

But at the same time, there is also the problem of unstable traffic. For example, if a celebrity video suddenly becomes popular, it can instantly stimulate the store's daily sales to thousands of orders, but after the popularity passes, it is likely to fall to the bottom again.

In addition, the proliferation of fakes and counterfeits is also a major dilemma facing TikTokShop. Compared with third-party platforms, TikTokShop has not yet established sufficient user trust, and various supporting basic services need to be improved. Therefore, traffic comes and goes quickly, and whether it can be cultivated for a long time is still a question worth discussing.

Based on this, TikTokShop is also improving various regulatory policies and strengthening the compliance review of the platform. According to feedback from many sellers, the platform has recently been frequently blocked, and local accounts are particularly hard hit.

"I tried to use TikToK influencers to sell my products. I had 20 to 30 orders on the first day, nearly 50 orders on the second day, and I closed my store on the third day. Overall, I can still make money, but the prerequisite is that the final stage must be strong." A seller revealed.

Overall, whether it is the possible sword of Damocles of a ban or the fact that the platform's e-commerce business has not yet matured, merchants are generally conservative about TikTokShop, and they mostly focus on testing new channels and driving traffic to Amazon stores.

It remains to be seen whether TikToK can break free from multiple regulatory crackdowns and continue to thrive in the e-commerce arena.