TikTok Shop is hiking up the minimum spending requirement for customers to qualify for its free shipping, according to documents obtained by Business Insider.
Regular customers now need to spend at least $25 to receive a free shipping voucher from the platform, $5 higher than last year.
The $5 purchase requirement will remain for first-time buyers.
The requirement increase will not apply to all customers immediately as TikTok is still testing the changes in various locations.
If that is not bad enough, TikTok noted that the shipping subsidies may not exist much longer on its e-commerce shop soon.
The move comes after TikTok Shop reported low earnings for its e-commerce platform since it first launched in November 2022.
According to The Information, the company is on track to lose hundreds of millions of dollars for TikTok Shop. TikTok is now on cost-cutting measures with several layoffs across affected divisions.
Also Read: TikTok Lays Off Around 60 Employees to Cut Costs
TikTok Shop Updates Requirements for Platform Sellers
Customers are not the only ones who will have a harder time on TikTok Shop.
Vendors will also need to meet new requirements to qualify for TikTok's subsidy.
Sellers that hire their own logistics provider now have to be at least registered for 30 days, complete 100 orders, and have an average shipping time of six days to qualify for free shipping subsidies.
This comes in after TikTok intended to increase its commission fee from 2% to 8% per order, more pain for vendors trying to make a living on the app's trading platform.
TikTok intends to roll out the changes in July. The platform promised to at least "provide merchants with ample notice" if it decided to proceed with the program updates.
TikTok Reports Good Performance Across Other Divisions
While its e-commerce section has been on a downturn, TikTok's other monetary sources have reported good numbers over the past year.
Most notable is its TikTok Live where users can buy virtual coins to gift to streamers, helping the platform to reach the $10 billion mark for consumer spending. The first for a non-gaming app.
TikTok takes half of each gift sent to streamers.
Related Article: TikTok Reaches $10 Billion Consumer Spending Milestone First for Non-Gaming Apps
