TikTok Shop in 2024
[Creator and DIBS Beauty founder, Courtney Shields, talks about products available on TikTok Shop]
Guess how much money we’ll collectively spend on TikTok Shop this year?
According to Bloomberg, TikTok aims to grow its U.S. ecommerce business (aka TikTok Shop) to $17.5B this year. In case you’re not on the clock app (that’s how the kids refer to TikTok), TikTok Shop is a recent rollout that allows users to shop from brands right in the app. Content creators can create videos with links to their favorite products featured directly on-screen, making it super easy to buy items in 1-click.
The $17.5B number is absolutely insane when you consider the fact that TikTok is mostly for impulse purchases, at least right now. The items on TikTok Shop are mostly novelty consumer goods (e.g., tech accessories) or fast fashion (e.g., trendy activewear, graphic tees). Nothing on TikTok Shop is a staple item. No one’s buying vitamins on here (or at least, I don’t think anyone should until we have some transparency in place around counterfeit products).
TikTok is going up against some big competition in mobile commerce (mcommerce), which Insider Intelligence projects will account for 49.8% of US ecommerce sales by 2027. Social commerce incumbents like Amazon, Facebook, and Instagram will be watching TikTok closely.
Watching this unfold is super interesting for me personally. I wrote a paper on the rise of mobile commerce during my senior year at Stanford, and the paper was completely boring. My survey showed that no one trusted the idea of buying something on their phone, and no one had any intention to buy on their phone in the future. I think this is another of many examples that show us - consumers can’t explain what kind of innovation they want, and they might not even know that they want it the first time they see it.
As a relatively new TikTok user myself, I’m noticing that many users don’t love that TikTok is pushing Shop ads and that influencers are jumping to capitalize on the affiliate fees they can earn by linking Shop products.
3 comments from me on TikTok Shop:
Monetization is essential (obviously) but iterative
Monetization is a bumpy road for many companies and TikTok is still a relatively young company that is trying to figure out it’s monetization path.
Vine (another social video app) died because it wasn’t willing to monetize. Vine’s popularity, user numbers, and app usage couldn’t save it from the inability to make money.
Consumers who opt-in to TikTok should know that it’s a business that will want to monetize in some way.
New creators will learn and adapt
Plenty of newer content creators are cranking out videos with affiliate links, absolutely raking in cash. They’re also infuriating some of their followers with this behavior.
They’ll learn lessons that they can’t flood their fans with consumerist content 100% of the time. If they don’t, they’ll lose their sales and the content ecosystem will adjust.
What’s driving the frenzy - product novelty OR in-app experience?
This is more of a question for the future.
Right now, the products available on TikTok Shop are cheap in price and quality. People compare it to Shein and Alibaba. Similarly, TikTok Shop isn’t entirely reliable right now because users don’t know if/how the company is enforcing regulations on sellers.
There are however, plenty of dupes and off-brands that would be very difficult for the average US consumer to go find. Overseas sellers are creating dupes of SKIMS, Free People, and Aritizia - just to name a few - and the masses are buying them up like crazy.
“Normal” legitimate brands are starting to join TikTok Shop, so we’ll soon see whether it was the product novelty alone or the convenience of the in-app shopping experience that has made TikTok Shop successful in the early days.
TikTok probably always had its sights set on ecommerce. The company primed us for instant gratification with 10-15 second short videos, and primed us for purchasing by allowing ads on platform in 2019. TikTok’s ecommerce business is evolving quickly - more to come.
