TikTok's Marketplace, predicted to be a significant breakthrough, may face alterations due to potential restriction plans.
TikTok's Marketplace, predicted to be a significant breakthrough, may face alterations due to potential restriction plans.
Autode, popular for sharing tech tips and tricks on his TikTok channel "kaansanity," ventured into TikTok Live during Black Friday and Cyber Monday for the first time, promoting items like headphones and game consoles. Surprisingly, he managed to earn $102,000 in just 10 hours, remarking, "It was my first time going live, and to make this much money in such little time was just insane. I didn’t expect it at all."
TikTok Marketplace is a platform that enables users to buy and sell products within the app, merging entertainment and retail. With a vast user base, including brands like L’Oréal, PacSun, and Scrub Daddy, it comprises over 500,000 sellers in the US. This marketplace generated an astounding $100 million in a single day during Black Friday, almost tripling its sales from 2023. Over the weekend, it saw a whopping 165% increase in shoppers year-after-year, as per data released this month.
However, a US appeals court this month upheld a law mandating TikTok's Chinese parent company, ByteDance, to sell the app by January 19 or face a US ban. The threat of a ban may hinder its progress, but TikTok creators remain resilient, claiming that a ban is highly unlikely.
"I don’t think TikTok is going anywhere. I think they’re going to figure it out, and there’s so many people invested in TikTok," said Autode. "It’s hard to ignore how much it means to its users."
What drives TikTok Marketplace?
TikTok Marketplace serves as a bridge between discovery and purchase, allowing users to shop products showcased in live videos, pinned on creator profiles, or tagged within content on their For You page. Before its shopping feature was launched, TikTok had already carved a niche as a platform for users to discover items to add to their wishlists, with 61% reporting purchasing items after seeing them on TikTok, thanks to hashtags like #TikTokMadeMeBuyIt, which boasts over 12 million posts.
Keenya Kelly, a content strategist and TikTok creator, explained that the combination of passive entertainment and shopping can entice users to make purchases.
“You’ve got all these people who are spending so much time just being (on TikTok) consuming and creating content,” she said. “When you mix in commerce with our favorite source of entertainment, then we’re going to spend all our money there.”
TikTok Marketplace's reliance on user-generated content allows consumers to trust the opinions of their favorite creators.
“If you see your favorite creator promoting a product on a live stream or a video, you’re more likely to buy it in that moment,” said Carrie Berk, a lifestyle content creator. Viewers seem to think that "if a beauty influencer is promoting a product on TikTok Marketplace, if she says it’s good, then it must be good."
TikTok users like Autode also appreciate the platform's focus on short-form videos, setting it apart from other social media platforms.
“When I click on a product and I can see hundreds or even thousands of people posting a video about that product authentically, that really helps,” he said. “On a different platform, I might just see some words, some reviews, some stars here and there, but seeing the product in action is different.”
Another factor contributing to TikTok Marketplace's growth is its popularity among younger users, with 62% of Gen Z consumers selecting TikTok as their preferred platform for information, surpassing search engines like Google, according to a report by marketing technology company SOCi.
“Gen Z as a whole has really chosen TikTok as their premier destination for content,” said Jen Jones, chief marketing officer of e-commerce platform Commercetools. “TikTok Marketplace seemed like a natural place for those dollars to be spent.”
What would a TikTok ban mean for other social media retail platforms?
Social media shopping is no novelty.
Ninety-two percent of retailers plan to allocate more resources to social commerce during the holiday season, according to a study published by Commercetools in October. This study indicated that Facebook Marketplace was the preferred social commerce platform for businesses, followed by YouTube, Instagram, TikTok Marketplace, and X.
In the event of a TikTok ban, experts see an opportunity for YouTube to capitalize on this gap, with YouTube Shorts catering to the demand for short-form videos while maintaining the platform's longer-form content.
In the past year alone, people watched over 30 billion hours of shopping-related content on YouTube, as per data shared by the company. In 2023, YouTube launched YouTube Shopping, enabling creators to tag products from brands within their videos and earn commissions.
If a ban does occur, this situation serves as a lesson for brands to avoid relying solely on one marketing platform for social commerce.
“It’s just really important for companies to have a diversified strategy when it comes to social shopping,” said Jones. “We know that social shopping is here to stay. You can’t get locked into just one platform.”
Kelly advises content creators to diversify their following by engaging in more direct outreach methods like email lists.
"We utilize social media to connect with a particular group of individuals," she stated. "It's essential to shift those individuals from social media to email so we can manage our business operations better."
Kelly remains unconcerned about the court decision pushing TikTok closer to a ban, believing the app won't be banned due to the vast number of small US businesses that depend on it.
"I don't foresee a ban happening because of TikTok's significant influence on US businesses," she said. "However, they might be forced to make changes they'd prefer to avoid, but I don't think a complete ban is on the horizon."
Berk, with almost 4 million followers on TikTok, considers the platform a significant part of her income generation, but she remains unfazed by the potential ban in the coming months.
"Discussions about TikTok ban have been ongoing since 2020, yet nothing substantial has materialized, making me skeptical," she mentioned.
Autade maintains accounts on Instagram, Facebook, and YouTube, but he revealed to CNN that TikTok is his primary marketing tool and the platform driving his success.
Despite the looming threat of a ban, he carries on with business as usual, planning a live event in January, similar to the Black Friday event.
"I am still committed to TikTok. My daily routine, business operations, and everything else remain the same until I receive further information," Autade stated.
In light of the potential TikTok ban, diversifying marketing platforms becomes crucial for businesses. Autode, for instance, has backup accounts on Instagram, Facebook, and YouTube, but he acknowledges that TikTok is his primary tool for marketing and has driven his success.
With a vast user base and strong reliance on user-generated content, TikTok Marketplace has become a significant platform for merchants, even generating $100 million in a single day during Black Friday. Whether or not a ban occurs, the focus on short-form videos, user opinions, and consumer trust is driving the growth of social media retail platforms.