Washington’s attempted ban is helping TikTok Shop become big business in Mexico

If the U.S. divest-or-ban law goes into effect and forces TikTok offline in the United States, some brands will plan to go south. The Mexican social shopping market is heating up, with multiple agencies advising their clients to invest in Latin American ecommerce.

The increasing interest in the Mexican version of TikTok Shop — which launched last month amid TikTok’s regulatory turmoil — is both a sound investment and a hedge against volatility in the U.S. creator economy. Latin American ecommerce will approach $200 billion in annual sales this year, according to eMarketer.

Authorities in the ad world have drawn up elaborate contingency plans that account for a potential U.S. TikTok ban, but TikTok Shop’s arrival in Mexico has added new layers to those machinations. According to Business Insider, agencies like Outlandish and Orca have worked with third parties in Mexico to onboard local TikTok Shop sellers. Outlandish’s plans even involve the establishment of a south-of-the-border production hub.

Brands like KimChi Chic Beauty, Beast Bites, and Wyze are among the U.S. companies plotting Mexican expansion. “It’s a logical play for any seller that saw success or could see success on TikTok Shop,” Outlandish CEO William August told BI. “Regardless of what happens in the U.S., they should be doing it anyway.”

By moving onto the Mexican version of TikTok Shop, brands can connect with a ballooning local audience of short-form consumers. A viewership boom during COVID-19 lockdowns has bred a new generation of vertical video stars like Caín Guzmán. Several Latin American Shorts hubs currently rank among the most-watched YouTube channels in the world.

Obviously, brands could migrate all of their spend to the other platforms that would remain active in the event of a U.S. TikTok ban. But agencies like Outlandish and Orca are showing clients that there’s another solution. In Mexico, those brands can stay on TikTok, and they’ll encounter plenty of new customers if they do.