TikTok tensions rise: Chinese sellers voice frustration as platform intensifies US rule enforcement, navigating a landscape of increased scrutiny.

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TikTok is requiring that U.S. entities registered by sellers be 51% U.S. owned and chaired by an U.S. passport holder, said the vendors and Winnie Wang, executive chairman of the Shenzhen Cross Border E-Commerce Association, China's largest sellers group based in the manufacturing hub.

Chinese e-commerce vendors that want to sell products on TikTok Shop in the U.S. as an alternative to Amazon are upset by moves they say the short video app has made to tighten enforcement of its rules for overseas sellers opening shops on the platform.

Chinese-owned TikTok, which faces the threat of having to divest its U.S. operations or be banned, has in recent weeks taken a harder stance toward enforcing its internal rules, according to five Chinese vendors on the site and an industry association that represents 3,000 Chinese stores selling products online.

TikTok is requiring that U.S. entities registered by sellers be 51% U.S. owned and chaired by an U.S. passport holder, said the vendors and Winnie Wang, executive chairman of the Shenzhen Cross Border E-Commerce Association, China's largest sellers group based in the manufacturing hub.

Many Chinese sellers had used U.S. entities to be recognised as U.S. merchants on the platform but the rules mean they will need to be re-registered as overseas sellers, which they say receive less prominence and support, putting them at a disadvantage compared to U.S. TikTok sellers.

TikTok, used by about 170 million Americans, has been seeking to strike the right balance between pursuing rapid growth and managing regulatory risks.

It has been ramping up its rhetoric that a U.S. move to ban the platform would take billions of dollars out of the pockets of creators and small businesses, while simultaneously seeking to catch up to bigger rivals such as Shein and PDD Holdings-owned (PDD.O),  Temu by signing up more merchants.

A TikTok spokesperson said the company has clear policies and requirements for all sellers on its shop, including for international sellers, and these have not changed since TikTok Shop was introduced in the U.S. in September 2023.

The Chinese vendors said they feel targeted by TikTok's rules and some are thinking about reducing the resources they put into pushing sales on the platform or finding U.S. partners.