• by Colin Kirkland , September 17, 2024

Social media feeds have become digital shopping centers as more people in the United States turn to social media to discover new products.

With the rise of TikTok and its U.S. launch of TikTok Shop, shoppable short-form video and livestream shopping have pushed social commerce into the mainstream, stoking competition between major social-media platforms like YouTube, Pinterest, Snapchat, and Meta's family of apps.

Amazon has maintained a stranglehold on the traditional ecommerce landscape in the U.S. for years, but TikTok and Pinterest are slowly taking more of its overall ad spend. According to Sensor Tower, TikTok represented 5% of Amazon ad spend in Q3 2024 vs. 4% the year prior, while Pinterest represented 17% of Amazon ad spend vs. 11% the year before.

ByteDance -- which launched TikTok Shop in the U.S. only one year ago with over 200,000 registered sellers and 100,000 content creators participating in an affiliate program -- is focused on building its liveshopping ecosystem stateside, using the blueprint of its wildly successful China-based app Douyin to capture U.S. consumers' attention.

The platform has since added hundreds of thousands more merchants and is aiming to grow its U.S. business tenfold to $17.5 billion this year, despite an ongoing effort by lawmakers to ban the app across the nation.

MediaPost spoke with Max Benator (CEO) and Lauren Stevens (CCO), the founders of Orca -- a social commerce company that sold the first-ever product on TikTok Shop -- to better gauge the current state of the industry and where it is going.

The interview, which focuses on the U.S. social commerce ecosystem, the power of consistency for merchants, and omnichannel strategy around liveshopping, has been edited for clarity and length.

MediaPost: What makes or breaks a livestream sale?

Max Benator: First, it’s important to remember that live means interactive. It means people are actually there, communicating. That sounds so obvious, but there have been major brands and platforms very recently that have run streams without the chat turned on. They have run streams with pre-recorded video.

Lauren Stevens: It's also important to experiment. If we really believe in a product or brand, we'll encourage them to leave their big shiny studio and test more basic creative in a more laid back environment, or vice versa.

MP: Is Orca primarily focused on TikTok Shop?

Benator: We are platform agnostic, but are primarily focused on TikTok Shop. It's the best complete ecosystem today in terms of social commerce, and that's because they have a mature platform on Douyin in China.

So their rollout is a lot more like rolling out for a new territory, whereas the other platforms are building something new. We work with all of them, so we can see how the approach, level of investment and level of intrinsic organizational knowledge is different.

MP: How have you seen U.S. consumers reacting to liveshopping so far?

Benator: When we have a really great product at a great price with a great host, they make the decision to purchase.

MP: What else about the liveshopping experience determines that outcome?

Benator: Liveshopping requires an ecosystem. That's the piece that a lot of early takes on the space have missed, and it's why TikTok Shop has been so successful. They are investing in building an ecosystem.

MP: What factors contribute to a liveshopping ecosystem?

Benator: A friend of mine who worked at YouTube was watching somebody purchase shoes in Seoul, Korea. They pulled out their phone and opened whatever social app is popular in Seoul, and they scrolled between eight different streams of the exact same shoe, looking to find the best price and the person who connected with them most to drive the sale home.

In America, because the ecosystem has not existed until recently, brand marketers get distracted with creating a big event around a product, with celebrities etc. when consumers just want to be able to shop freely, like they would in a mall.

MP: So repetition is important to delivering results?

Stevens: It's more about consistency. The more merchants and brands are broadcasting their content live, the more people will walk into their online store and shop.

If they only commit to one 24-hour livestream, only the people who see it in that time frame will be able to shop. But if they are doing it daily, they will get more eyeballs, build a bigger community, keep their store open, get people in the door and excite them with great deals.

MP: It sounds like your office operates outside of regular business hours.

Benator: We stream until 10 or 11 PM PST, or 2 AM on the East Coast. Prime streaming times are in the evening. From noon onward, you can actually watch the sales volume in aggregate start to rise as it gets later.

MP: What are some of the biggest challenges livestream shopping faces in the U.S.?

Benator: It's helpful to remember that the technology powering livestream shopping is not new. However, major commerce platforms have not adopted content-driven shopping, and the major content and social platforms have been very happy with their advertising business, so they never deployed shoppable tools at scale.

MP: What does this mean for the future of social commerce in the U.S.?

Benator: The ecosystem in the U.S. will continue to be accelerated as the major platforms race to roll out shopping functionality on social platforms and content capabilities on the big commerce platforms.

It's unfortunate that we live in a country where just a small number of technology companies control our user behavior based on what they choose to roll out or not roll out. But that's the number one piece of the puzzle. TikTok will continue to lead the charge, and the others will continue to play catch up until they can actually catch up.

MP: What kind of brands are seeing the most success on TikTok Shop?

Benator: Every category is present. Our client base consists of maybe eight Fortune 100 clients, but we also have a significant number of SMBs. They're all there -- major brands, prestige and luxury brands, small and medium-sized businesses, independents, even generics and low-cost sellers.

MP: How would you coach larger brands interested in social commerce?

Benator: The biggest unlock for larger brands is omnichannel strategy.

Channel strategy for a product involves a brand's retailers, their D2C, their digital sellers, how they allocate inventory and how they allocate their promotional strategy.

The incumbents usually get the best benefit from omnichannel strategy, and the newer channels are often not the recipient. If smaller brands have been able to move more quickly and allow for the best merchandising offers on TikTok Shop, they have already reaped the rewards.

MP: Do you think liveshopping will become a mainstay in brand efforts as it has in China?

Benator: Yes, we think it's going to become part of the baseline digital shopping experience. As a brand or a retailer, you won't be offering the baseline compelling experience at a certain point in time if you simply provide images and a paragraph.

MP: Are you concerned with the potential TikTok ban slated for 2025?

Benator: It's not a significant concern for us as a company. We happen to have a robust team of creators and affiliate managers that work with 12,000 affiliates who actively sell products across all platforms.

There are other platforms that are leaning into short, shoppable video, and so that's a significant opportunity. And on the live side, TikTok has the lead by far. But both content and commerce platforms are moving very quickly to grow their live businesses. So each platform is a little bit different.