The rise and rise of TikTok
If you have not heard of TikTok yet, you have likely been living under a rock. TikTok has become one of the most effective channels for generating viral trends and sales over the past several years. It is one of the largest mobile-based social platforms in the world, with an estimated 1.2 billion active users in Q4 2021, it has proven to be a gold mine for businesses trying to reach their audience and create an impact across the globe.
Because many of TikTok’s users are Generation Z, eCommerce businesses find it a very attractive platform, given that this population has a growing disposable income that is frequently spent on dining out, technology, cosmetics, and clothing. As a result, TikTok’s goal of maximising the value of its user base through the implementation of shopping features makes perfect sense. Having said that, due to TikTok’s massive audience numbers, and continued growth, any demographic can be targeted.
Video sells, right?
The social media network started experimenting with social commerce in November 2019, allowing users to buy goods directly from the app. TikTok and Shopify formed a partnership in October 2020 to help businesses reach the platform’s rapidly expanding user base. With the advent of in-app purchasing, TikTok’s aspirations for social commerce have been further advanced. For its UK consumers, TikTok introduced a live shopping experience in December 2021. Similar to the QVC TV Channel, Livestream shopping enables customers to watch online content and shop at the same time. According to reports, TikTok abandoned its live commerce plans in Europe and the US six months after the feature’s initial launch in the UK due to a failure of the early rollout.
Next stop, Amazon?
In October 2022, according to job postings, the social media platform is considering building fulfilment centres in the USA, suggesting that TikTok hasn’t given up on its social commerce ambitions. TikTok intends to develop its own supply chains that will enable it to provide warehousing, shipping, and return services for merchants. This step implies that the social media platform is in the process of leveraging e-commerce as a significant revenue stream which will likely open the doors to acquiring a portion of the global ecommerce market, where sales are predicted to grow by 56% over the coming years and reach 8.1 trillion dollars by 2026. The expansion of TikTok Shop and the development of its own supply chain systems may represent a severe threat to the world’s largest online retailer Amazon.
Conclusion
With its impressive number of over 1 billion active users, TikTok should be considered by the players that are currently dominating the online shopping market. We can only speculate how certain aspects of the platform may change in the future, but one thing is for certain: the success of TikTok’s business model will surely impact global commerce.