TikTok Shop is undergoing a significant transformation, moving away from its previous model of low-price competition and indiscriminate product listings. The platform's new policies signal a shift toward refined operations, brand development, and professionalized commerce—marking the end of its wild growth phase.
The Evolution of TikTok Shop: From Quantity to Quality
TikTok Shop has long attracted cross-border e-commerce sellers with its unique "surprise" appeal. However, recent policy changes—including deposit requirements, new store assessment periods, and category management rules—indicate a fundamental restructuring of the platform's approach.
Category Management Policy: Focusing on Vertical Markets
Since February 1, TikTok Shop has been rejecting product listings that fall outside a store's designated main category. Sellers were required to select one primary product category by February 7, and may now only sell within that category across all national markets. This change effectively eliminates the "spray and pray" approach of mass listings, forcing sellers to specialize in specific vertical markets.
New Store Assessment Period: Raising Quality Standards
New regulations limit daily order volumes for recently opened stores. Regular and invited sellers face caps of 10 and 50 daily orders respectively during a 60-day assessment period. Stores must reach 300 or 1,000 total orders (depending on seller type) to graduate from probation. This policy aims to improve new store quality and prevent market disruption from low-quality entrants.
The Underlying Strategy: From Listings to Brands
These order volume and category restrictions reflect TikTok Shop's deliberate move away from mass listing models toward specialized operations. The platform appears focused on attracting high-quality manufacturers and brand sellers to elevate product standards and user experience.
The Challenges of Mass Listing Models
Shrinking Opportunities: Single-Category Operations Become Standard
With the new category management policy, mass listing sellers face severely constrained opportunities. Previously, sellers could list products across multiple categories, leading to issues with non-compliant products, misrepresented items, and counterfeit goods. The single-category mandate aims to combat these problems while addressing supply chain issues and ensuring product quality.
Supply Chain Limitations: The Problem with Asset-Light Models
Most cross-border TikTok Shop sellers operate asset-light models, sourcing products from wholesale platforms without owning manufacturing facilities. The single-category requirement effectively streamlines the platform's supply chain by favoring established manufacturers—presenting significant challenges for non-factory sellers, particularly those relying on mass listings.
Multi-Store Strategies Under Pressure: The Impact of Higher Deposits
Earlier deposit requirements already discouraged multi-store operators, with many shifting to single-store approaches. Now, with category restrictions, sellers wanting to maintain diverse product offerings must return to multi-store strategies. However, with each store requiring separate deposits—and each business license limited to five stores—low-margin sellers may struggle to justify the costs.
The Future of TikTok Shop: Specialization and Branding
Official Recommendations: Vertical Focus and Quality Improvement
In a January 17 announcement, TikTok Shop encouraged sellers to specialize in vertical markets to build sustainable businesses. The platform advised careful product selection with quality control, and authentic marketing that avoids overpromising and underdelivering.
Deepening Vertical Expertise: Precision Targeting for Better Conversion
As TikTok Shop prioritizes compliance and product quality, sellers with clear specialization will benefit from more precise audience targeting—leading to higher conversion rates and potentially greater profitability.
The End of Price Wars and the Rise of Brand Value
New Opportunities for Brand Sellers: Moving Beyond Price Competition
The new store assessment policies may attract premium brands and well-resourced sellers who previously avoided the platform due to its price-driven culture. Many brand owners view deep discounting as damaging to brand equity—a race to the bottom with diminishing returns.
The Downside of Discounting: Platform Image at Risk
TikTok Shop's Southeast Asian and UK markets have been dominated by low-price items, creating a perception that success requires competing on price alone. However, early responses to the single-category policy suggest sellers are beginning to raise prices. While low prices aren't inherently problematic, an overreliance on discounting risks limiting the platform's long-term potential.
TikTok Shop's Path to Brand Development
Product Differentiation and Content Marketing: Building Brand Equity
As a video-first commerce platform, TikTok Shop naturally favors distinctive products and compelling content. Yet many current sellers continue pursuing generic listing strategies, hoping to stumble upon viral products rather than building recognizable brands.
The Inevitability of Branding: Key to Western Market Success
Mass listings cannot create lasting brands, and without brand development, TikTok Shop may struggle in Western markets where consumers prioritize brand value. The new category policies likely reflect this strategic consideration as the platform eyes European and American expansion.
Challenges in Western Markets: Competing with Established Players
TikTok's e-commerce efforts have made limited progress in Europe and North America. In the UK, complaints about counterfeit goods have plagued the platform, while in the U.S., established players like Amazon present formidable competition. Most Western brand sellers prefer independent storefronts, leaving TikTok reliant on Shopify for supply chain support—a dependency that limits its ability to cultivate brand relationships.
Attracting Premium Sellers: Overcoming Growth Barriers
Amintense competition for Chinese manufacturing partners, TikTok Shop risks missing opportunities with premium factories and brand sellers. The single-category policy and vertical market emphasis represent strategic moves to address this challenge.
Improving Customer Experience: Streamlining Purchases
Previously, some multi-category sellers using drop-shipping models created delays between order and fulfillment, frustrating customers. As more professional sellers enter the platform, overall shopping experiences should improve—though continued focus on customer satisfaction remains essential.
Conclusion: Branding as TikTok Shop's Ultimate Advantage
While operational refinement marks TikTok Shop's initial transformation, brand development will determine its long-term success. Shedding its discount-driven image and attracting premium sellers presents an ongoing challenge—but for forward-looking merchants, the time for brand strategies and specialized operations has arrived.