TikTok Shop Surpasses Target, Costco in US Online Retail Spending

TikTok Shop has emerged as a significant player in the U.S. online retail market, capturing a larger share of consumer spending than the online operations of major retailers like Target and Costco. In July, the platform accounted for approximately 2 percent of U.S. online retail spending, a notable increase from 1.2 percent in the previous year, according to data from Consumer Edge.

This surge places TikTok Shop ahead of the online divisions of Target and Costco, which held around 1.3 to 1.4 percent of the market in July, and Home Depot, with approximately one percent. The platform officially launched its U.S. shopping service in 2023, making its rapid ascent remarkable.

TikTok Shop's growth strategy integrates shopping with entertainment, allowing users to discover products through videos and creators rather than through direct searches. This model is significantly driven by the platform's network of creators, who can directly link to products within their content. These creators can either promote items from their own affiliated seller accounts or earn commissions by showcasing products from other brands available on TikTok's marketplace.

Affiliate creators play a crucial role by testing and demonstrating products on camera, guiding viewers to purchase items via their unique links. This collaborative ecosystem, where influencers and sellers work together, fosters repeat business, partly due to shopper loyalty to specific creators.

Analysis of the second quarter revealed that a small but significant portion of TikTok Shop's customer base is highly engaged: individuals who made at least 20 purchases represented about 30 percent of the platform's spending, despite making up only five percent of all buyers.

The platform's appeal is also broadening beyond its initial Gen Z demographic. In the second quarter, shoppers over 35 constituted the fastest-growing age group in terms of year-over-year spending, indicating TikTok Shop is reaching a wider audience.

TikTok has been actively expanding its shopping capabilities, incorporating major brands such as Samsung, Disney, and Ralph Lauren. The company has also introduced a membership program offering benefits like free shipping, similar to Amazon Prime.

During the 2025 Black Friday and Cyber Monday period, TikTok Shop generated over $500 million in U.S. sales, underscoring its establishment as a significant shopping destination. However, it still trails behind market leaders Amazon, which holds about 35 percent of U.S. online retail spending, and Walmart, with approximately seven percent.