TikTok is moving into luxury retail, part of an effort to expand its TikTok Shop marketplace into a high-end shopping destination for purses and watches that can fetch thousands of dollars. 

Once considered a virtual dollar store, TikTok Shop now showcases $11,000 handbags from Hermes and Chanel, or rare, limited-drop sneakers from collaborators like Louis Vuitton and Nike. TikTok Shop also now carries watches from Rolex and Cartier– timepieces the social media giant added just in time for Black Friday. Most of the items are used and listed by second hand resellers, many of whom are using artificial intelligence to verify the products’ authenticity in hopes of leveraging TikTok’s enormous global reach to find new buyers.

The emergence of high-end luxury goods on TikTok Shop is a sign of the company’s evolving e-commerce ambitions since it launched in the US two years ago to comparisons with Chinese fast-fashion heavyweights like PDD Holdings Inc.’s Temu, and Shein Group Ltd. TikTok Shop is still a destination for cheap finds, with some vendors offering steep discounts throughout the holiday season, but its push into luxury also shows that the once-prominent threat of a TikTok ban in the US has done little to dim the company’s online shopping aspirations. 

If all goes well for TikTok, it’s possible that top luxury brands like Chanel, which already see the video platform as a valuable marketing engine, could eventually sell directly to consumers there, too.

“Given the previous perception that, ‘Hey, this is like a dollar store,’ it’s phenomenal,” said Vidyuth Srinivasan, chief executive officer and co-founder of Entrupy, which provides luxury resale vendors on TikTok Shop with AI technology that authenticates their handbags and sneakers. “You wouldn’t even know that that was a perception a year and a half ago.”

TikTok has made shopping a priority in recent years, spending aggressively to expand its Shop business to several international markets, including Brazil, Japan, Mexico, France, Italy, Spain, and more than half a dozen other locales. While the company earlier this year scaled back internal sales goals for TikTok Shop US, there is still optimism that it can become one of the most valuable pieces of the company’s American business. Under a proposed deal to keep TikTok US alive, its prized e-commerce arm would reportedly remain under the control of its Chinese owner, ByteDance Ltd.

For 17th Street, a pre-owned luxury boutique in New York that joined TikTok Shop just before the holidays last year, the platform has become one of its biggest drivers of both online sales and in-store foot traffic, said Olivia Sperduto, its head of social media. It’s sold close to 1,000 designer bags through TikTok, she said, including coveted Hermes Kelly and Birkin bags that cost tens of thousands of dollars at retail, as well as staples from Chanel Ltd., LVMH Moet Hennessy Louis Vuitton, and Kering SA’s Balenciaga. 

An estimated one-third of the company’s profits are now driven by TikTok, and sales from the platform have come “very close” to what it’s moving in-store, Sperduto said. TikTok takes an 8% cut of every bag 17th Street sells through the app, she noted, a hit they’re willing to take given the volume of business it’s driving.

TikTok sellers have been known to sometimes peddle cheaper knockoff products- in beauty, for example- so the rise in high-end commerce has led to more business for companies that authenticate second hand goods. Entrupy is one of five TikTok-approved authenticators that sellers, including 17th Street, use to verify that their expensive, second hand handbags, luggage, accessories, and footwear are legit. Watches, meanwhile, require a certified watchmaker.

The platform also takes enforcement action aimed at cracking down on policy violations, including counterfeits. In the first half of this year, it rejected the applications of 1.4 million prospective sellers that failed to meet Shop standards and more than 70 million product listings before they went live, according to a TikTok Shop safety report released this month. It also removed more than 200,000 “restricted” or prohibited products after they were listed.

Entrupy, which has been working with TikTok since it launched Shop in 2023, sells a device with a microscopic lens that slips over the phone’s camera like an iPhone case. Sellers can then photograph their items’ logos, labels, hardware and other fine details. The New York-based company has trained its AI on reams of data and images of real high-end goods- and the best fakes it can find- that it’s collected for over a decade and continues to update. 

After analysing that data, along with other information users input manually, the algorithm makes a judgment about the item’s authenticity. TikTok’s terms of service requires sellers to provide a certificate of authenticity from Entrupy or another approved company within 24 hours of receiving an order to prevent it from being automatically cancelled. 

“It is about adding that layer of trust,” said Srinivasan. TikTok and Entrupy declined to share specific figures around sales of luxury goods on the e-commerce service, but claim that they are rising.

TikTok launched the pre-owned luxury category in the UK last year in partnership with several popular British luxury resale businesses and says it opened the category in the US in 2023. Nicolas Waldmann, who leads global governance for TikTok Shop, told Bloomberg this month at the company’s New York office that part of the appeal of second hand luxury is its role in the “circular economy” – a model that emphasises reuse as consumers focus more on sustainability and climate change. 

Gen Z is also the key driver of the luxury resale market, analysts say, making TikTok Shop fertile ground. Last year, an executive who ran pre-owned shopping for Douyin, TikTok’s sister app in China, relocated from Shanghai to Seattle to help develop the US business. He now oversees luxury resale and collectibles (like watches) and is expanding the team to focus on live selling, according to LinkedIn.

TikTok Live video streams- which are pushed to TikTokers in their main “For You” feeds- are becoming an increasingly powerful sales tool for luxury resellers looking to engage eager buyers. TikTok recently launched live auctions, enabling vendors to create bidding wars over luxury handbags and other designer goods. Some sellers are turning their auctions into high-energy spectacles, while others are trying to replicate the service one would find at a high-end boutique, with hosts and their prospective customers chatting through comments and direct messages. 

On one recent TikTok Live, Los Angeles-based seller Law Divine Luxury showcased goods from Prada and Chanel as offers for other pre-owned handbags, like a $1,699 leather tote from Louis Vuitton, flashed on the bottom of the screen. 17th Street, meanwhile, has brought on a dedicated livestream host to broadcast bags to shoppers for five straight hours daily. The company sold an HAC Birkin through Live for $20,000, and recently started streaming bigger shows on Sundays, where it has occasionally brought in over $30,000 in one day, Sperduto said.

Vintage is trendy, and the growth of pre-owned luxury in social commerce is being partly driven by consumers’ insatiable appetite for older finds that are both hard to come by and better made, said Sperduto. Short of TikTok being banned nationwide, which is looking less likely by the day, she expects demand will only climb. 

“It’s going to keep growing tremendously because all of the bags that are brand new right now are obviously going to be vintage one day,” she said, noting that the older Murakami handbags from Louis Vuitton are outselling the new ones. “Right now people are just loving the vintage bags.”