Like the viral speed of the hashtag #TikTokMadeMeBuyIt, TikTok is becoming one of the fastest-growing social commerce channels worldwide and is helping brands reach hundreds, even thousands, of new consumers via videos of skin care or vegan ice cream – if they can market themselves right.
With 80 million daily users – 41% of them between the ages of 16 to 24 – TikTok, worth $250 billion, is the most valuable privately held company in the world, according to Bloomberg. Next to TikTok’s in-stream and live-stream shopping tools – which retailers like Walmart have been experimenting with – the platform’s newest feature, TikTok Shopping, could prove to be even more valuable for brands.
The new feature, in partnership with Shopify, has undergone nearly a year of trials and has expanded its partnerships with other platforms like Square and PrestaShop.
Later this year, TikTok will also launch a Shopping API, allowing businesses to include their product catalogs directly on the platform, and eventually include those products in their organic content.
“While pretty new, there is no doubt that TikTok’s shopping feature has added great value to the platform, because consumers today use social media for shopping just as much as they do for socializing,” said Keith Nealon, CEO of Bazaarvoice, a provider of product reviews and user-generated content (UGC) solutions that hosts a network of over 11,500 brands and retailers.
In a consumer survey Bazaarvoice ran earlier this year, almost 74% of respondents said they agree or strongly agree that they find themselves more influenced to shop via social media now than they did pre-pandemic, said Nealon.
Thirty-five percent said that before the pandemic they rarely shopped from social media channels, but since March 2020, 30% said they now often do, he said.
“In fact, when asked specifically where they shopped before the pandemic began and after it started, our data shows that TikTok has seen a 500% increase in shoppers,” said Nealon.
Social commerce sales have been rapidly increasing since 2020, and eMarketer predicts that sales will reach $36.62 billion in just the U.S. alone in 2021 – a 35.8% increase over 2020’s $26.97 billion.
TikTok is the fastest-growing social commerce channel, reported Shopifiy in a study from February 2020 to February 2021, reporting that the platform saw a 76% increase in growth.
How does it work?
The shopping tab is identified as a shopping bag symbol on a business’ TikTok profile – which doubles as their storefront – where users can scroll through the products being sold. Rather than click on a link leading off-site, the shopping feature allows users to shop directly on the app.
Product links within videos can lead users to make a purchase then and there while watching the product in action.
The shopping feature is primed to especially suit brands who use UGC like customer ratings, reviews, photos and videos within their TikTok videos, said Nealon. Nearly two-thirds – or 62% – of shoppers said that they’re more likely to buy a product if they can watch customer videos and photos about it first.
Brands that cater to younger audiences are going to see the biggest benefit from using the shopping feature, simply because the audience on TikTok skews younger, said Nealon.
Among 18-34 year-olds surveyed, two-thirds of them said that social media actively influences their purchasing, said Nealon. If brands are utilizing UGC in their marketing (like many brands on TikTok do), they’ll be even more attractive to those younger shoppers, he said. Almost three fourths (72%) of 18-34 year-olds say they prefer it when brands use visual UGC for social media outreach.
Which brands are using the shopping feature so far?
Most brands using TikTok’s shopping feature are beauty and health brands, like Kylie Cosmetics, which was one of the first brands to take advantage of the new shopping feature. The company, which holds 2.2 million followers on TikTok with 10.6 million likes on its videos. Other popular brands on the site include KajaBeauty, Elf Cosmetics and Glow Recipe.
According to a study by the World Advertising Research Center (WARC), 85% of people said they bought something after seeing it advertised or reviewed on social media. Food and beverage purchases were also more likely to be unplanned, according to the study, and over 30% of users said they discovered new brands via the platform’s “For You” feed and trending videos.
While beverage brands like Red Bull, Coors Seltzer and Pepsi are popular on TikTok, they haven’t yet made the switch to the shopping feature, nor have many brands within the natural, organic and heath foods market.
Still, some brands within those industries have made a name for themselves on TikTok with successful accounts, like Sabra, Dreampops, KIND snacks and Beyond Meat.
All four of those brands have over 28,000 thousand followers each, with Dreampops taking the lead: 177,000 followers with 4.7 million likes on its videos. All four brands also have over 130,000 “likes” on their videos.
Still, the follower count of those food brands are crumbs in comparison to more recognizable brands like Red Bull (6.2 million followers) and Oreos (1.3 million followers). The most-followed brand on TikTok is TikTok’s main account, boasting 58.5 million followers. That’s followed by Flighthouse, a media and entertainment brand, (28.2 million followers) and Netflix (21.1 million followers).
One brand that has seen an increase in sales from using the platform is Little Moons Mochi ice cream. Though it doesn’t use the shopping feature yet, the brand currently has over 253,000 followers and 3.6 million “likes.” After the Japanese ice cream bites went viral on TikTok, co-founder Howard Yang told The Sun in February that the brand’s sales had skyrocketed up 700% at Tesco supermarkets over just a month, thanks to the platform.
Before brands entered the screen, influencers and content creators were organically using and reviewing products on brands’ behalf and documenting them in popular hashtags, which have led sales to surge for certain products like Ocean Spray’s cranberry juice, The Pink Stuff and the Bissell Little Green.
With genuine authenticity, branded hashtag challenges can be a competitive edge for brands to interact with more users through creative and engaging content that also ropes in those who may have otherwise never heard of the brand. These challenge pages also display “Shop Now” buttons to direct users back to the brand’s online shops where they can purchase the product then and there instead of having to order it offsite or buy at a store.