TikTok Shop to Launch in Mexico Despite US Ban

TikTok Shop, the e-commerce arm of the social media platform TikTok, is set to expand into new markets, like Mexico, despite a potential ban in the United States. 

TikTok Shop, ByteDance’s e-commerce platform integrated into its short-video app, has become a central focus for the company’s growth strategy. The platform enables brands and merchants to showcase and sell products directly through videos or livestreams. In 2024, TikTok Shop recorded a seven-fold increase in gross merchandise volume (GMV) in the United States, reaching between US$7 billion and US$8 billion, making it the company’s largest and fastest-growing market, according to analytics provider EchoTik.

TikTok Shop recently began operations in Spain and Ireland, adding to its existing presence in markets such as the United States, the United Kingdom, and six Southeast Asian countries. However, its launch back in July of 2024 in Mexico was delayed indefinitely, raising questions about its plans for Latin America. While ByteDance did not provide an official explanation, analysts suggest that the delay may have stemmed from the company's need to focus resources on addressing challenges in the United States, where TikTok faces potential bans over national security concerns.

Mexico represents an opportunity for TikTok Shop, given the platform’s popularity in the country. According to the Digital 2024 report by Hootsuite and We Are Social, TikTok users in Mexico spend an average of 45 hours per month on the app, opening it over 400 times. About 32.6% of users use TikTok to discover products to buy, highlighting its potential as a powerful e-commerce channel. Over one-third of Mexican advertisers allocate over 50% of their budgets to the platform, attracted by its engaging format and ability to reach targeted audiences. This figure is expected to grow as brands further embrace social commerce.

In 2022, Brazil and Mexico ranked among TikTok's largest markets, with 73.58 million and 50.52 million users, respectively, according to Statista. About 30% of internet users in these countries engaged with the app, a figure projected to rise to 40% by 2025.

Unlike traditional e-commerce giants like Amazon, TikTok Shop thrives on a content-driven approach. The platform leverages influencers and affiliates to generate sales, often using unique campaigns to drive engagement. For example, Goli Nutrition, a top-selling brand on TikTok, generated US$7 million in sales in 30 days through an aggressive affiliate marketing strategy that included offering high-value rewards, such as luxury cars, for top-performing affiliates.

However, TikTok Shop’s sales funnel remains distinct from established platforms. It lacks the robust metrics and standardized processes used by competitors like Amazon or Walmart, making it a channel that requires a tailored strategy. Most of its sales come from low-cost items promoted through viral content.