TikTok has rolled out TikTok Shop to all 100 million US users (per our May forecast). TikTok Shop is an in-app commerce experience, including several features: Live and short-video commerce, an in-app marketplace, a logistics arm, Checkout and Shop ads, and an affiliate arm for creators. Here’s an overview of what will—and will not—work for TikTok’s new features.
Mcommerce is driving ecommerce growth in the US, and will account for close to half (49.8%) of US ecommerce sales in 2027, according to our June forecast.
The social commerce opportunity for TikTok is massive, but it risks facing the same challenges as Instagram and Facebook. “Just because TikTok builds it, doesn’t mean that buyers will come,” said our analyst Jasmine Enberg.
Gen Z is ready to buy on TikTok. Some 68% of Gen Zers are likely to make a purchase directly on the platform, putting it just behind Instagram (71%), in line with YouTube (68%), and ahead of Facebook (62%), according to Jungle Scout data from March. A willingness to buy will help TikTok Shop out of the gate, but it will need to innovate to rise above YouTube and Instagram.
TikTok users are ready to be influenced.
Impulse buying is easy on TikTok.
TikTok Shop is losing money. The service is expected to lose over $500 million in the US this year, per The Information. Initial loss is to be expected as TikTok invests in its major ambitions, but it’s still an expense (albeit one TikTok can certainly afford).
Products already feel repetitive, cheap, and counterfeit.
For cheap goods, Temu and Shein already exist. Temu overtook TikTok as the most downloaded app in the US in Q1 2023, per Sensor Tower, and has extended its lead since then. Shoppers looking specifically for cheap Chinese goods can stick with apps like Temu and Shein.
Livestream ecommerce still hasn’t taken off in the US.
Users have their own concerns.
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