With over one billion active users, Tiktok’s new Electronic Commerce (e-commerce) shop is a genius marketing strategy, already generating more than $2.5 billion globally in one month.
TikTok shop benefits brands by allowing them to sell their product, users get paid for promoting said products, and the platform earns commission from sold items.
TikTok invited a few hundred brands to test out their shop in Nov. 2022 before releasing it to United States users in Sept. 2023. After testing, they added new features brands wanted to see like a dedicated Shop Tab that allows businesses to promote their products to customers.
Creators can get paid to promote a product for a brand or earn money from promoting their own business products.
“The primary way creators and brands can help each other boost sales [on TikTok] is through affiliate marketing,” wrote Business Insider.
Instagram and Facebook also have something similar: Meta Shop. However, it is not as successful as its counterpart because of the ease that comes with buying in TikTok shop.
“[Instagram] allows users to quickly purchase [a product] by clicking on the links, which will direct them to [a new page],” wrote Locad, a logistics engine for E-commerce. “Tiktok lets buyers directly buy from the platform itself.”
To attract more shop owners to set up businesses in their app, TikTok wrote on their website that having the whole shopping experience in the app means more sales.
According to Shopify, an E-commerce website, “Partnering with trusted creators and using influencing marketing to increase authenticity,” is a benefit of TikTok shops.
Another difference that motivates users to buy from TikTok shop rather than Instagram is the way creators promote a product. On Instagram renowned brands and influencers tend to do most of the promotional content, however on TikTok normal people can get paid to do the same.
Users are 1.3 times more likely to buy through TikTok directly, according to Impact. “Consumers find [TikTok shop] boosts their satisfaction by buying, testing, and sharing product tips on [TikTok].”
TikTok also allows sellers to choose their commission rate from five percent to 20 percent. To encourage selling on the app, TikTok offers bonuses, discounts, and special offers to creators.
This makes TikTok a useful tool for small businesses, content creators, users, and TikTok itself, pushing people to use TikTok even more than they already do, and boost sales while doing so.
