The e-commerce landscape is facing new challenges as TikTok navigates legal battles and platforms like Temu rise to prominence. TikTok’s recent struggles serve as a warning for Chinese cross-border platforms operating in global markets amid increasing geopolitical tensions. When TikTok faced a potential ban in the US, sellers were left in limbo.
Despite the uncertainty, many remained optimistic, focusing on preparing for peak season and developing content strategies. TikTok’s internal efforts to boost morale and set ambitious growth targets fueled this selective optimism. China’s cross-border e-commerce industry has experienced significant growth, with platforms like AliExpress and Temu achieving a combined gross merchandise value exceeding $100 billion.
For Chinese sellers, these platforms offer valuable opportunities to expand their reach. Seller Lin Feng saw his order count on Temu surge to 20,000, selling ten times more than he typically would on Amazon.
TikTok’s legal challenges reshape e-commerce
“On Amazon, I might sell 1,000–2,000 units a month, but on Temu, sales increased tenfold,” he said. Alibaba’s AliExpress introduced a fully managed service model in late 2022, simplifying operations for sellers and leading to substantial growth. Similarly, Temu promoted its own fully managed model with aggressive marketing, spending approximately $230,000 per second on advertisements.
Temu’s success has disrupted Amazon’s long-standing dominance in the cross-border e-commerce market. By the end of 2023, Temu had become the second most-visited e-commerce site globally, with a user base reaching 91% of Amazon’s by August 2024. While Temu’s promise of high sales is attractive, it presents challenges for sellers who must be prepared for the operational demands of a sudden surge in orders.
As Chinese platforms navigate the complex global dynamics of e-commerce, they face both opportunities and challenges in their pursuit of international growth. The persistence of business owners amid these global challenges highlights the resilience and adaptability of the industry.
