Late last week marked TikTok’s official launch of its in-app ecommerce feature in the U.S. Previously only available in the UK and seven countries across Southeast Asia, TikTok Shop has now invited select U.S. brands to participate, though it’s not yet clear which brands those are.
TikTok Shop appears on brand profiles within the app, offering users the ability to browse products and even make a purchase without leaving TikTok. Eligible American brands are able to sell products via in-feed videos, livestream videos (“LIVEs”) and a product showcase tab.
The Chinese-owned app is promising “higher quality traffic,” “better consumer experience,” and “seamless creator collaboration” to merchants who register for the initiative.
TikTok says that it will take a 5% commission fee for each product sale, which is reduced to 1.8% for the first 90 days after registering and being accepted.
The Financial Times reported that TikTok’s North America general manager Sandie Hawkins will oversee TikTok Shop in the U.S. as part of a general restructuring at the company.
The social giant’s ecommerce goals in the U.S. are part of a larger company initiative referred to by the company as “Project Aquaman,” which also includes global fulfillment centers (or warehouses) to create an ecommerce supply chain with streamlined delivery and returns for customers.
“The goal is to import a version of China’s $400 billion livestream shopping industry to the U.S., where the format is still largely synonymous with television networks like QVC,” Semafor reported.
This hasn’t been as easy to implement as the company originally hoped. In the UK, TikTok’s Shops rollout was littered with issues, including operational challenges and a serious lack of consumer interest, forcing the company to scale back its live ecommerce initiative in Europe.
However, things may go better among American users. It’s too early to tell. Widespread livestream ecommerce would provide TikTok with an additional revenue stream based on the influence it already has on U.S. consumers, which includes 100 million users, 70% of them U.S. teenagers, many of whom use the short-video platform to discover new products.
Another sign that TikTok Shop may thrive in the U.S. surrounds its use as a key discovery platform for younger audiences who use the short-video app as a stand-in for Google when seeking out products and businesses.
With this new feature, users (especially a Gen Z audience) may begin using their favorite social entertainment app as a one-stop-shop for products of all kinds.
Not only would revenue skyrocket for the company, which also owns TikTok’s Chinese counterpart ByteDance, but TikTok Shop may attract a whole new wave of brands and advertisers who want a new way to showcase and sell their products.
It will be interesting to see which brands have been selected by TikTok to try out the new feature and how they use it.
But overall, it depends on user interest. If Americans are as into TikTok Shop as consumers in Asia, TikTok will pose a serious threat to major ecommerce platforms like Amazon. But if they react like European consumers, the whole initiative could quickly capsize.