Marketplace Briefing: TikTok Shop recruits U.S. sellers for cross-border push into Mexico

The notice also highlights logistics features intended to simplify cross-border fulfillment. Sellers will be able to ship directly from their U.S. warehouses, with no requirement to hold inventory locally in Mexico. TikTok says it is recruiting a “select group of sellers” for a beta launch running from March 12 to March 20, with onboarding sessions scheduled during that window and an application deadline of March 6 for interested merchants. It’s unclear how many merchants were invited to participate in the new initiative, but the recipients likely include retailers that have performed well on TikTok Shop’s U.S. marketplace.

The initiative underscores TikTok Shop’s growing focus on international expansion and cross-border commerce as it looks to scale its marketplace beyond the U.S. Mexico has emerged as a particularly attractive target market: Brands and agencies previously told Modern Retail they were already exploring TikTok Shop Mexico as a way to reach new audiences and diversify revenue streams abroad. By allowing U.S. sellers to use their existing accounts and ship from domestic warehouses, TikTok is making it easier for brands to start selling to customers in Mexico.

The main challenge for U.S. brands expanding to Mexico is “the investment needed in effort, money and resources to do everything that’s needed to happen in Mexico to test their product,” according to Pedro Argüelles, a country manager for Mexico at social-commerce agency Orca, which helps TikTok Shop sellers launch and sell their wares in the country.

He views TikTok Shop’s new beta program as “the trial stage” for U.S. sellers to get a sense of whether they’d like to sell in the region. As he put it, “They can see if the product fits the market in Mexico, and once the volume makes sense, then they can scale to fully operate in Mexico.”

TikTok Shop did not respond to a request for comment.

Mexico’s e-commerce boom

It’s been a year since TikTok Shop launched in Mexico. At the time, the company was facing a looming divest-or-ban law in the U.S., prompting some brands to explore international markets like Mexico as a hedge against the platform’s uncertain future stateside. TikTok has since finalized a joint venture transferring parts of its U.S. business to a consortium including Oracle, Silver Lake and MGX, but the company is continuing to build out its commerce operations abroad. For TikTok Shop, the initiative helps cement its status as a global brand.

“Like any e-commerce company, they want to maximize growth as much as possible, and to do that, you have to be present in as many markets as you can be,” said Alex Nisenzon, the chief executive of e-commerce analytics firm Charm.io.

While TikTok doesn’t publish aggregate marketplace metrics, product-level prices and sale counts are visible in the app. An analysis of that data by Charm.io estimates TikTok Shop sold more than $497 million worth of products in Mexico between late March last year and February. Between September and February alone, sales on TikTok Shop Mexico climbed 128%, the firm’s data shows.

That’s still far below the numbers TikTok Shop has achieved in the U.S., its largest market. TikTok Shop only launched in the U.S. in September 2023, but already its U.S. operations are on par with eBay, a 30-year-old e-commerce company. Mexico is a much smaller market by comparison, and the platform is still in its early days there, but it’s growing quickly in a region where online sales are expected to outpace the global average.

Latin America is the world’s fastest-growing retail e-commerce market, according to eMarketer. In October, eMarketer forecast that online spending in the region would rise more than 12% to $191 billion in 2025. Mexico, in particular, is expected to drive a lot of that growth. EMarketer forecast that retail e-commerce in Mexico will reach 17.7% of total sales this year, and by 2029, Mexico will be one of just six countries worldwide to exceed 20% e-commerce penetration among the 67 markets the firm tracks.

“It’s still an underpenetrated market,” Argüelles said. “It’s far from being saturated. The volume that you can sell is huge.”

Since its launch in Mexico, TikTok Shop has drawn local sellers like budget clothing retailer Super de Ropa, which, according to Charm.io data, is the platform’s top-selling brand in the country. But U.S. and international brands are gaining prominence in Mexico, too. Beauty Creations, a California-based beauty retailer with stores in Los Angeles, is among the top 10 bestselling brands, according to Charm.io. Beijing-based Pop Mart, maker of the viral Labubu dolls, was also a top revenue generator in February.

Agencies are betting on that momentum to continue. Orca, which works with brands like Estée Lauder, Samsung and Unilever, launched a dedicated office in Mexico City last year, the company’s CEO and founder, Max Benator, previously told Modern Retail. Since then, the company has also added four professional production studios to film livestreams and has built a small local team of video editors, Argüelles said. Orca trains local Spanish-speaking talent to host the streams. To grow social commerce in the region, Orca encourages brands to go live two or three times a week for a minimum of two hours, he added.

Orca currently has seven brands up and running on TikTok Shop in Mexico and expects that number to reach around 12 in the coming months, Argüelles said. Average order values vary by category but remain relatively low. Makeup orders average around $20, supplements about $26 and electronics roughly $28-$29.

Charm.io’s Nisenzon said TikTok Shop’s growth in Mexico is being driven by a familiar mix of categories at lower price points than in the U.S.

“When you look at dynamics around average unit prices in Southeast Asia, they’re very similar to what we see in Mexico, where consumers are very willing to pull the trigger when it’s a lower cost purchase,” he said. While “overall prices are a lot lower than we see in the U.S.,” the categories are “essentially the same,” with beauty, women’s apparel, and phones and electronics leading in Mexico.

While TikTok Shop built its reputation in the U.S. as a go-to destination for cheap bits and bobs, prices on the platform have risen in recent months as bigger brands have joined the platform, Modern Retail previously reported.

Agencies like Orca are also laser-focused on onboarding more brands to sell in Mexico, but especially bigger brands with name recognition. As Argüelles put it, “We still have a lot of room for big brands to enter into the market.”

What I’m reading

• Amazon is developing tools to let other apps and platforms sell ads within chatbots, according to The Information.
• Instagram is testing an AI “Shop the look” feature that automatically adds product recommendations to posts, sparking backlash from creators, per Bloomberg.
• Amazon cut jobs in its robotics division this week, Business Insider reported.

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