BEIJING - ByteDance, TikTok’s parent company, has been replacing US-hired staff near Seattle with managers connected to China, aiming to replicate its e-commerce success in Asia after sales fell short in America.

TikTok Shop initially set a goal to increase its US e-commerce business tenfold last year to US$17.5 billion (S$22.6 billion) in transaction volume, but had to drastically lower that objective, according to people familiar with the plan.

TikTok established its Shop business in the Seattle area near Amazon.com, the online retail giant it was aiming to displace. Meetings that used to be held in English are now often conducted in Mandarin and managers increasingly write in Chinese when communicating on Feishu, ByteDance’s internal Slack-like app, with English-speaking staff forced to rely on the built-in translation function.

“We continually assess our business needs and have made recent team adjustments to strengthen our organisation, remaining confident in the future ahead,” a TikTok Shop spokesperson said. The company previously called the reported e-commerce transaction target “inaccurate.”

More than 100 TikTok Shop employees in the United States have been fired or have left amid confusion between leaders that has worsened the work environment, according to people familiar with the company.

The cultural transition taking place in the firm coincides with its fight for survival in the US – due mainly to the app’s Chinese ties. A national security law passed by Congress last year requires TikTok’s US business to be spun off from its Chinese parent company or it will face a ban. Lawmakers warned that TikTok’s ties to China pose a threat to the safety and security of American users. 

US President Donald Trump has twice delayed the ban – with legal assurances from his attorney general – and another deadline for divestiture looms later in June, though that might also be extended, the Wall Street Journal reported. 

ByteDance said during the Biden administration that it had no plan to sell TikTok, but in April the Beijing-based company confirmed that it had been in discussions with the Trump government regarding a potential solution for TikTok US. It said any agreement would be subject to approval under Chinese law.

ByteDance leaders meanwhile are bringing in people who are familiar with what worked for the company in China, where Douyin, its TikTok clone for the Chinese market, has evolved into a US$490 billion shopping phenomenon. Mu Qing, who was the head of Douyin’s e-commerce, moved to the Seattle area to run TikTok Shop in the US. Six other leaders with Chinese backgrounds were appointed in April, according to an internal memo viewed by Bloomberg.

Assigning Chinese executives to run TikTok’s fastest-growing business may raise questions about its previous corporate promise to distance the US operation from China. After Trump initially tried to ban the app during his first term, the company announced a security plan dubbed “Project Texas” and vowed to wall off the app’s US data and operations from any Chinese oversight.

TikTok Shop is the biggest source of revenue for the video-sharing app besides advertising, and it has become a major investment area for ByteDance. Adding full-scale commerce to its eye-catching content and popular influencers sets it apart from rivals like Instagram and YouTube. The company still aims to challenge Amazon in major markets.

One challenge is that habits of many American users trend toward passive TikTok scrolling as opposed to making purchases in the app. Some US sellers told Bloomberg that they have also been reluctant to invest in the platform, given the possible ban. 

The final tally for the US e-commerce business’s 2024 sales came in at around US$9 billion, according to an estimate by Singapore-based consultancy Momentum Works. 

TikTok Shop’s US struggles haven’t halted the company’s global shopping ambitions. ByteDance in 2021 rolled out e-commerce services in countries including Indonesia, Vietnam and the UK. In South-east Asia, it’s already the region’s biggest shopping platform after Shopee, according to Momentum Works.

In 2024, TikTok Shop opened in five countries in Europe, including Germany and Spain. The Europe expansion was delayed because the company first prioritized US growth, Bloomberg reported.

This is a crucial month for TikTok in the US. The company will host merchants and creators in Los Angeles next week for a summit featuring some of the new leaders of the e-commerce unit. The current deadline for ByteDance to sell the TikTok’s US operation is June 19 and there have been several interested suitors.

The company came close to a possible spin-off in April to a consortium of investors that included Oracle, but the deal was scuttled in part because of Mr Trump’s trade war with China. BLOOMBERG

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