TikTok followed other social platforms’ foray into the e-commerce frontier by debuting TikTok Shop in September 2023. TikTok’s venture into e-commerce is an attempt to stand out in an area where its main competitor Meta, owner of Facebook and Instagram, proved unsuccessful.
Instagram took down its Shopping feature, which failed to catch on with users. Instagram quietly removed “Shops” from the app by March 2023. Issues with the platform included the inability of businesses to capture customer information and the lack of popularity outside of China, according to TechHQ.
Will TikTok Shop overcome those limitations? The platform’s monthly active user growth slowed from 12% year over year per quarter in 2022 to 3% in 2023, coinciding with TikTok’s decision to dip into e-commerce. This decrease outpaced Insider Intelligence’s estimate of a growth dip of 3.5% year over year from 2022 to 2023.
ByteDance, TikTok’s parent company, laid off staff as it lost $500 million on TikTok Shop. Sellers were incentivized with free listings, free shipping, zero commissions, and warehousing space. TikTok Shop came under fire from users, with Redditors commenting that TikTok Shop “ruined” the app.
Lately, TikTok is looking to rein in seller subsidies while increasing seller fees to strike the right balance. According to Bloomberg, TikTok Shop aims to generate as much as $17.5 billion, or 10 times what it earned last year.
The big question is, will TikTok successfully implement e-commerce while avoiding conflict with users? Many users, including buyers and sellers of products, have complained about TikTok Shop’s issues with ease of use, increase in advertising, returns, payment to sellers, and more.
IZEA’s latest trends report shows that on-platform shopping and social commerce are poised to rise this year. However, to succeed, brands should follow these best practices:
- Provide a seamless transition from browsing to buying: Create an easy shopping experience by ensuring the switch from browsing to buying is convenient for users.
- Incorporate influencer marketing and user-generated content: Elevate your social commerce efforts by integrating influencer and user-generated content. Collaborate with content creators and influencers to share authentic content that resonates with your audience.
- Leverage IZEA’s resources for shoppable content: Through our Solution Partners, we offer Click2Cart, a one-click, direct-to-cart shopping experience for social media. By clicking on a post, users will be directed to a retailer’s website with a pre-populated cart, streamlining the path to purchase.
Are major U.S. brands using TikTok Shop?
More than 200,000 brands quickly began using TikTok Shop shortly after its release, according to a TikTok blog post. Some of the first brands to set up shop on TikTok were PacSun, Cider, Willow Boutique, and Revolve. E-commerce platforms such as WooCommerce, Salesforce Commerce Cloud, BigCommerce, and Magento have integrations on the platform.
Cosmetics is one of TikTok’s most significant e-commerce opportunities, with more than enough of an audience and many creators posting beauty content daily. Cosmetic brands such as Hero Cosmetics, Glow Recipe, Kitsch, and Kylie Cosmetics have joined TikTok Shop.
How are influencers reacting to TikTok Shop?
Overall, the reaction to TikTok Shop from influencers has been mixed. Many users, especially in comments on posts about the new feature, have detailed negative experiences, including poor quality of products, false or misleading listing of items, and issues with returns or payment to creators.
Bananas, an influencer who reviews cosmetic products, food, and much more, showed followers a Stanley Cup purchased via TikTok Shop that appeared to be fake.
Melissa, another makeup influencer, made a video showing users how to access TikTok Shop. While Melissa’s TikTok is helpful to those looking to try it out, it shows that TikTok Shop has some issues with ease of access for most users. Melissa’s video resulted in a 30% sales jump the day it was posted, according to a ModernRetail report.
While TikTok works out the kinks of an important feature that could add a whole new function to the app, other influencers have pushed back against the negative reaction.
Julia, an online shopping influencer bringing followers savings and shopping tips, spoke on the topic in response to a comment. She said she’s found incredible discounts on TikTok Shop but that anybody should be skeptical the same way they should be about an online shopping platform.
Some creators embraced posting about TikTok Shop to create ironic videos. Moorags, a brand producing durags, jumped on the trend with a positive review of his product. Another popular video was titled “Reasons to not buy this $3 cup off TikTok shop,” followed by several shots of a Stanley Cup with no reasons listed.