TikTok Shop’s commercial model is evolving as the platform moves beyond initial markets and ramps operations across Europe. According to an industry specialist advising brands and cited by Morgan Stanley, the U.K. rollout in 2021 effectively acted as a testing ground for adapting the social-commerce framework outside Asia, exposing both early pitfalls and opportunities.
Those initial lessons included the presence of lower-quality overseas merchants on the platform and weaker consumer engagement with livestream shopping compared with experiences in Asia-Pacific markets. In contrast, the expert said the U.S. expansion in 2023 produced more encouraging results, creating momentum that is now being harnessed for a broader European push.
Faster rollout expected across Europe’s major markets
Morgan Stanley’s note, citing the expert, states that the recent calendar of expansion into Europe’s so-called "big 5" - Germany, France, Italy, Spain and Ireland - is likely to scale more quickly than the initial U.K. launch. The expert highlighted regional distinctions that could shape adoption rates: Germany is viewed as especially attractive from a demand standpoint, while France is noted for a deeper supply of influencer talent capable of supporting product promotion and social discovery.
Social discovery remains central to the platform’s proposition. Consumers frequently encounter brands through content-first interactions and then transition to purchase via the Shop experience, rather than arriving with a pre-existing purchase intent as they might on more traditional e-commerce marketplaces.
Category dynamics - Beauty versus Apparel
Within product categories, the expert identified Beauty as a natural fit for TikTok Shop. Reasons include standardized formulations that ease quality consistency, strong visual appeal that converts in short-form and live formats, and comparatively lower return rates. For these reasons, the expert and Morgan Stanley expect Beauty to persist as the platform’s largest long-term category.
Apparel, by contrast, presents complexity. Success in clothing depends on sampling products to influencers, managing fit-related returns and handling other logistics that can raise operational friction. The expert suggested that Apparel’s growth will trail Beauty, and that the latter will remain the larger segment over time.
Logistics and fulfillment - a work in progress
TikTok Shop is also adjusting its logistics approach as volumes increase. In Europe the platform currently operates with a mix of third-party logistics providers and established partners to build trust while scaling. The expert noted an important contrast with the U.S.: TikTok Shop has mandated sellers to adopt its Fulfilled-by-TikTok service from late February or face the risk of exclusion. While parallel requirements could materialize in Europe over time, the platform does not yet have the operational capacity to fully meet European demand on its own.
Advertising shifts and competitive implications
On the marketing side, brands are increasingly allocating budgets across multiple channels. Some advertising spend is being directed to TikTok Shop as companies emphasize product discovery rather than traffic driven solely by explicit purchase intent. Morgan Stanley observed that consumers often use the platform to discover and identify with a brand, whereas incumbent e-commerce sites remain more focused on intent-driven buying.
That shift in how consumers find products presents a competitive risk for third-party marketplaces and fashion-led platforms. Morgan Stanley specifically flagged the potential for social commerce to siphon ad spend away from established channels, saying this poses a risk to players such as Zalando. However, the bank’s expert also noted that TikTok Shop currently functions best in categories like Beauty, where lower return rates limit immediate pressure on fashion-centric platforms.
Conclusion
TikTok Shop’s trajectory across Europe reflects a period of calibration informed by early market tests. The platform’s strengths in social discovery and category suitability in Beauty give it a differentiated proposition, while apparel and broad-scale fulfillment remain areas requiring further operational refinement. Advertising reallocations toward discovery-led channels and gradual changes to fulfillment requirements are likely to be key determinants of how quickly TikTok Shop can translate consumer engagement into sustainable commerce volume across European markets.