The company is initiating the rollout of TikTok Shop to all users of the app in the United States, aiming to create a significant new source of revenue.
During New York Fashion Week, TikTok attracted marketers from renowned brands like Madewell, H&M, and Gucci. They transformed the trendy East Village restaurant Cathédrale with a video wall displaying fashion trends such as “little luxuries” and tall mannequins dressed in TikTok-inspired styles.
TikTok has firmly established itself as a crucial advertising platform for brands looking to connect with its youthful user base. However, at the event, marketers were buzzing about TikTok’s efforts to sell products directly within the app.
The reason for this excitement: After nearly a year of testing, speculation, and some internal changes, TikTok is launching TikTok Shop for all U.S. users this week. The company plans to expand the rollout of a Shop button on the app’s home screen, directing users to a marketplace and driving traffic to videos featuring Shop buttons for specific products. Both options allow users to make purchases with just a few clicks without leaving the app.
E-commerce represents a significant opportunity for the company, as it seeks to leverage the app’s influence as a cultural trendsetter into a major new revenue stream. However, this venture has proven challenging for other popular social platforms in the United States, including Instagram.
To ensure success, TikTok is actively promoting videos with shopping buttons in users’ feeds. Additionally, for now, the company is offering generous discounts and coupons to shoppers and waiving commissions for many sellers. TikTok has already onboarded 200,000 sellers to TikTok Shop, and more than 100,000 creators can create videos and livestreams with shopping buttons.
Nico Le Bourgeois, one of the executives overseeing TikTok Shop in the United States, stated, “We have a very aggressive plan to make a splash in the industry and make sure that people out there understand that TikTok is a place for shopping.” The company also plans to run ads for TikTok Shop on the web and elsewhere and will have a significant presence during Black Friday and Cyber Monday.
The Shop button on TikTok’s main bar started rolling out in August and will reach all 150 million U.S. users by early October.
An executive shakeup at TikTok last month raised questions about the company’s e-commerce direction. Sandie Hawkins, who was overseeing e-commerce efforts, left the company for personal reasons. Nico Le Bourgeois and Marni Levine have taken over the role and report to Bob Kang, the global e-commerce chief of TikTok’s parent company, ByteDance.
TikTok appears to have shifted away from a primary focus on promoting shopping through livestreams, which is a successful model in Asia but has not gained the same traction in North America. Creators are increasingly featuring products in videos marked with an orange Shop icon, and viewers can easily purchase these products through Apple Pay, PayPal, or credit cards.
TikTok Shop’s Shop button is now visible to 40 percent of users on the main screen and will reach all U.S. users by early October.
The company has faced criticism for enabling the sale of subpar or copyright-infringing products and has been compared to fast-growing Chinese shopping apps like Shein and Temu, known for cheap goods shipped directly from China. TikTok’s executives argue that they are more akin to Amazon or China’s TMall and employ technology and manual moderation to enforce policies. They emphasize that over 90 percent of TikTok Shop’s sellers are U.S.-based and highlight partnerships with major brands like Benefit, Olay, L’Oreal, and e.l.f.
Creators interested in selling products through TikTok’s marketplace must choose from the available selection. Some have found success, while others have encountered challenges with the assortment of items, which include products from various foreign shops.
Despite initial skepticism, some creators have experienced significant success on TikTok Shop. For example, Alyssa Pannozzi, a TikTok personality with over 200,000 followers, saw substantial sales after featuring products with positive reviews that resonated with her followers. Other creators have also joined TikTok Shop’s program.
TikTok’s executives remain focused on keeping users engaged on the platform, whether through shopping, video content, or community involvement. The commission model for TikTok Shop’s future remains uncertain, but the company is prioritizing adding more sellers to the platform.