The news: As TikTok faces a potential US ban starting January 19, social commerce platforms are repositioning to seize opportunities created by the uncertainty.

Rival platform Whatnot has raised $265 million at a roughly $5 billion valuation to support aggressive US market expansion, while TikTok parent ByteDance rushes to establish Lemon8 as a potential lifeline ahead of the app's possible US ban.

Market movements: Whatnot, whose monthly active users have grown 180% YoY, looks to be emerging as a major live shopping rival amid TikTok’s challenges:

• The company has launched aggressive creator recruitment initiatives targeting TikTok talent.
• Whatnot is expanding beyond collectibles into mainstream retail categories.
• Strategic partnerships with major retailers have expanded its product offerings.

Meanwhile, ByteDance is building a “backup strategy” of sorts through Lemon8:

• US downloads surged 150% in December, with 70% coming from US users.
• Daily active users have reached 1 million, though still far behind TikTok.
• The platform has integrated with TikTok accounts for seamless user migration.

Why it matters: TikTok drove US social commerce growth last year, creating more awareness of livestream shopping in the process—and the threat of a ban could be reshaping the social commerce landscape.

• Regular users of live shopping platforms have nearly doubled from 7% to 13% between June 2023 and August 2024.
• When making purchasing decisions, 34% find live shopping videos very or somewhat influential.

Our take: ByteDance is being hurt by the specter of a US TikTok ban, but pushing Lemon8 won’t be enough to stop investors from betting on established US-based alternatives.

• Regulatory scrutiny may extend to other ByteDance properties, including Lemon8, and the Supreme Court's pending decision could affect all Chinese-owned apps.
• Meanwhile, Whatnot's focus on authenticated products and domestic operations positions it favorably amid regulatory uncertainty.
• US platforms like Whatnot, based in California, stand to benefit from a regulatory environment that increasingly favors domestic companies.

Go further: The above is culled from our FAQ on the US TikTok Ban, which will be updated throughout the month as news arises.

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