TikTok shop: TikTok is determined to establish in-stream shopping as a trend, building on its successful shopping initiatives in China which have become a major revenue source for the local version of the app.
Despite a lukewarm reception to TikTok shopping by western audiences, the platform is launching a new push by inviting selected retailers to join its in-app shopping campaign and offering them incentives such as shipping subsidies and sales boosts to generate interest.
TikTok shop recent success in promoting its app Lemon8, with the help of TikTok influencers, indicates the platform’s potential to influence consumer behavior and usage patterns.
However, the western market has yet to embrace live-stream shopping, which has been a huge success for Douyin, the Chinese version of the app. Douyin saw a 320% increase in eCommerce sales last year, largely driven by live-stream shopping, and is projected to be worth over $500 billion in 2023, which accounts for half of all US eCommerce activity.
TikTok shop: TikTok Launches New Push on In-Stream Shopping
These statistics have fueled interest in in-stream shopping among various social media apps over the past two years, including Facebook, Instagram, Twitter, and Pinterest, which experimented with in-stream shopping during COVID lockdowns as a means to transition to the next stage of online spending.
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However, TikTok shop as physical stores reopened, sales patterns reverted to normal, and people returned to their previous purchasing habits instead of sticking with online shopping. Consequently, most apps have reduced their eCommerce efforts.
Yet, TikTok is determined to make it work, not only as a new paradigm to maximize its benefits but also as a way to compensate its top creators by offering them a way to earn money through their in-app presence. This is the purpose of Lemon8, which allows influencers to exhibit products and earn affiliate commissions. The platform’s latest drive towards in-stream shopping, by providing incentives to sellers, could make it a more routine behavior, broadening TikTok’s business prospects.
Although there is still a long way to go, TikTok may shift usage behaviors and make in-stream sales more prevalent, which could create numerous monetization opportunities for the app. Of course, this is subject to the possibility of being banned. However, if it avoids that outcome, eCommerce will continue to be a significant focus for the app.