TikTok Shop: 6 Months Later, What’s the Verdict?

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TikTok Shop: 6 Months Later, What’s the Verdict?

If you’re like me, you’ve heard lots about TikTok Shop, seen ads as you’re scrolling, or fallen into the #Tiktokmademebuyit rabbit hole. As a marketer, I got curious – how is TikTok Shop doing since it launched? Are brands finding success? Let’s find out!

The New Generation of Online Shoppers

TikTok Shop, while still in its early stages, is competing to become the next big online retailer amongst brands like Amazon, Shein, and TEMU. But TikTok has something the other companies don’t – an extremely popular social media network that leverages viral videos to reach buyers.¹

TikTok focuses on short, music-driven videos and appeals to a younger, Gen Z demographic that encourages authenticity and virality.^2<?sup>It’s also a form of brand discovery, as Gen Z’ers are 77% more open to purchasing from new brands than any other generation.³

The way brands are showing up is “very different from what people experienced in the past,” says Dr. Jenny Radesky, an associate professor of pediatrics at the University of Michigan who studies the impact of advertising and social media on young people.

“You have an advertising message coupled with something that’s very pleasurable, rewarding, satisfying, and fun. And so it’s activating this emotional part of your response to an advertising message. It’s happening in more of an unconscious, subconscious way.”⁴

TikTok’s biggest selling points to brands are:

An array of creators & sellers: The shop launched in the U.S. in September 2023 with more than 200,000 sellers and 100,000 creators sharing products through its affiliate program.
High Engagement: They have highly engaged customers. With an average engagement rate of 2.65% by follower count, TikTok is still the most engaging social media platform. Following not-so-closely behind is Instagram with an average engagement rate by follower count at just 0.70%.⁵
A Frictionless Experience: Their platform is a ‘place to experience the joy of discovering and purchasing new products without leaving the app’.⁶ “Someone can see a product introduced to them by the company that sells it and they don’t even have to go to another website. They can go from awareness to action, the whole funnel, in 30 seconds,” Director of Newegg studios Drew Roder said.³

TikTok Key Features

In-Feed Video and LIVE Shopping: Shop tagged products directly from videos and LIVEs in the For You feed.
Product Showcase: Browse product tiles, read reviews, and purchase directly from a favorite brand’s profile. Businesses can curate custom product collections directly on their profile page.
Shop Tab: Businesses display their products on a new product marketplace and customers can easily search and discover promotions.
Affiliate Program: Creators can connect with sellers through new commission-based product marketing opportunities.
Shop Ads: New TikTok Shop Ads bring more opportunities for sellers to promote their TikTok Shops, so customers can discover and complete purchases all within TikTok.
Fulfilled by TikTok: A new logistics solution that lets merchants focus on their products while TikTok Shop stores, picks, packs, and ships sellers’ products to customers.⁶

TikTok Shop Numbers

The holiday season is the perfect time to test shopping strategies, offers, and campaigns. During Black Friday and Cyber Monday week, TikTok reported that 150,000 creators and sellers published shoppable videos or Live shopping streams.⁷

Furthermore, TikTok said over 5 million new customers made a purchase on TikTok Shop during that weekend — with a result of 22.8 billion views across all shoppable live streams and videos.²

One category that is benefiting from the TikTok Shop is beauty. Since launch, 81% of dollar sales sold through the shop were for Health & Beauty.

When looking at the top-selling Health & Beauty categories on TikTok Shop, beauty is rising to the top with facial skin care, lip cosmetics, cologne & perfume, and body lotion & treatments ranked in the top five. They are also seeing supplement and vitamin combination packs in the top five.⁵

TikTok Shop Drawbacks

The reviews from brands that have used TikTok Shop are mixed. Some have seen huge success in a short period of time, and have found a balance between selling their product and being authentic on the platform.

User Interface: Jamie Ray, founder of influencer marketing agency Buttermilk, said that at the moment “the UI feels a little bit cheap, but hopefully that will improve as the platform evolves” for TikTok Shop. “Ultimately, if TikTok [Shop] creates the environment that brands want to spend time, energy, resources, and money on, it has the potential to set a new standard for social commerce,” Ray said. “But there are things that need to be addressed — for clients, agencies, creators, and consumers — for it to succeed.”
Dupes: There are concerns over open vendor format, dupes, pricing, and algorithm; Buttermilk works on campaigns for luxury brand campaigns like Dior Beauty and Swarovski, making it a priority to sit alongside top brands and top talent. “Currently, there is a large amount of counterfeit goods and dupes on the platform”.⁸
Small businesses: Krishna Subramanian, founder and CEO of Captiv8, an end-to-end influencer marketing platform, said that thus far the agency has found TikTok Shop to work best for small online brands — which can test agile creator campaigns and see what works.⁸

The Future

This is just the beginning. A Bloomberg report found that TikTok aims to grow U.S. e-commerce sales to $17.5 billion in 2024.⁴

Even more videos could become shoppable, as the social media app is testing a feature that identifies and links products in any post, not just those from influencers. TikTok previously confirmed it was using artificial intelligence (AI) to scan videos for products and suggest similar items available for purchase through its marketplace.²

Even if TikTok doesn’t become as big as Amazon, it will be an interesting case study for how social media and e-commerce can come together in an extremely efficient and effective way.