TikTok Shop Puts European Plans on Hold, Concentrates on US

TikTok shop on phone

TikTok has reportedly decided to put its plans for expanding its eCommerce business in major European markets on hold.

Instead, the ByteDance-owned social media platform will concentrate on growing its presence in the United States, its most lucrative market, where it faces potential divestment or ban, Bloomberg reported Friday (May 31).

TikTok’s eCommerce business, known as TikTok Shop, has been experiencing rapid growth and has become one of the app’s most popular features, according to the report. By combining video content with impulse buying in a visually appealing manner, TikTok Shop has set itself apart from competitors. The success of TikTok Shop is based on ByteDance’s own Douyin, which is one of China’s largest eCommerce platforms.

TikTok had planned to roll out its shopping platform in Spain, Germany, Italy, France and Ireland as early as July. However, the company has decided to pause these expansion plans, along with its intentions to bring the Shop feature to Mexico and Brazil, the report said.

The decision reflects ByteDance’s strategy of focusing on the U.S. market to avert a possible ban, per the report.

ByteDance’s leadership recognizes the importance of concentrating on the U.S. market, which boasts 170 million monthly users, according to the report. By demonstrating its value to domestic merchants and consumers, TikTok aims to mitigate concerns that have discouraged some merchants from signing up for the platform. The company has set a goal to grow its merchandise volume in the U.S. up to $17.5 billion this year.

One of the reasons behind TikTok’s decision to pause its European expansion plans is the potential regulatory scrutiny it may face, similar to what it has encountered in the U.S., the report said. The company understands that a full-scale European expansion could invite regulatory challenges, and it wants to avoid such complications. TikTok is currently under investigation by the European Union (EU) regarding its lighter version of the app in France and Spain, which is being scrutinized for potential addiction risks.

A TikTok spokesperson told Bloomberg that the company is “guided by demand.”

“We’ve seen the positive impact of TikTok Shop, and we’re excited to continue experimenting with this new commerce opportunity,” the spokesperson said in the report.

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New House Financial Services Leadership Targets Digital Asset Regulation

Congress

The House Financial Services Committee has chosen leadership with an eye toward digital asset regulation.

Rep. French Hill (R-Ark.) announced the new appointments Thursday (Jan. 9), promising to “right-size the regulatory system for particularly community banks,” and “create a regulatory framework for digital assets that will protect investors and consumers.”

In addition, Hill said the committee would “ensure agencies are focused on their core statutory directed missions” and not political agendas.

The committee’s vice chairman — a position held by Hill in the last term — will be Rep. Bill Huizenga (R-Mich.). In addition, Hill said, Rep. Mike Lawler (R-N.Y.) will serve as vice chair for communications, and Rep. Mike Haridopolos (R-Fla.) will be committee whip, the latter to “ensure our Republicans are working together toward our common goal.”

In addition, the committee has announced chairs for its various subcommittees, including: Rep. Ann Wagner (R-Maine), Capital Markets; Rep. Andy Barr (R-Ky.), Financial Institutions; Rep. Bryan Steil (R-Wis.), Digital Assets, Financial Technology and Artificial Intelligence.

Rep. Warren Davidson (R-Ohio) was named chair of the Subcommittee on National Security, Illicit Finance, and International Financial Institutions, with Rep. Dan Meuser (R-PA) overseeing the Subcommittee on Oversight and Investigations. Lastly, the Subcommittee on Housing and Insurance will be chaired by Nebraska Republican Rep. Mike Flood.

As PYMNTS wrote earlier this week in a look at the upcoming legislative session, there have been a number of attempts at laws to create frameworks around digital asset markets.

For example, the Financial Innovation and Technology for the 21st Century Act was passed by the House but not the Senate. The act would, among other things, establish standards for digital assets and consumer protections, and segregation of funds.

And then there’s the question of cryptocurrency. Speaking with PYMNTS, Mike Katz, a partner in Manatt, Phelps and Phillips Financial Services Group, said that “despite the razor-thin Republican majorities, there is a growing bipartisan consensus in Congress around the need for thoughtful, innovation-focused crypto and AI legislation.

“It will be interesting to see if any digital asset bills are part of the tax-and-border-focused reconciliation package already being discussed in Congress. I’d expect a strong stablecoin bill to move quickly given existing bipartisan support,” he added.