What should brands know before jumping on TikTok Shop?

There are currently over 200,000 sellers on TikTok Shop in the US and over 100,000 registered creators sharing products through TikTok Shop Affiliate. TikTok has said it plans to make $20bn in merchandise sales from TikTok Shop in just one year.

The opening of TikTok Shop taps into trends such as #TikTokMadeMeBuyIt and the explosion in social commerce. According to a study by McKinsey and Material, 70% of people on TikTok say they discover new brands and products through the app, while 83% say that TikTok plays a role in their purchase decisions.

TikTok Shop is currently available in the US and UK, along with seven Asian countries. It is worth noting that Indonesia has taken the decision to ban TikTok Shop after being the first country to pilot the e-commerce service in 2021. The Indonesian government said it was acting to protect local physical and online retailers.

What is TikTok Shop’s offering?

• In-feed video and live shopping: Users can shop tagged products directly from videos and in the ‘For You’ feed.

• Product showcases: Browse product collections, read reviews and purchase directly from a brand’s profile page.

• Shop tab: A product marketplace where businesses can display their products and customers can easily search and discover promotions, get new product recommendations and manage their orders, all within a single tab.

• Affiliate program: A way for creators to connect with sellers through commission-based product marketing.

• Shop ads: Brands can buy spots within the TikTok Shop page to promote their shop pages and purchase through the ad.

• Fulfilled by TikTok: A logistics solution that TikTok handles the packing and shipping process for merchants.

• Secure checkout: TikTok works with trusted third-party payment platforms to facilitate transactions on TikTok Shop.

Should brands delve into TikTok Shop?

Founder and president of Billion Dollar Boy, Permele Doyle, says: “By combining the power of community, creativity and commerce, TikTok Shop has huge potential for brands , finally shifting from an awareness play to a full-funnel strategy driving performance.”

For Doyle, though, it is still early days and there are some drawbacks to consider.

“There is some distrust on purchasing a product directly through TikTok and I think that impacts the threshold consumers are willing to spend on the platform,” she says. Anecdotally, Doyle says she’s heard of some faulty or fake products being purchased.

Then there is also the idea that users want to go to TikTok for inspiring content and “not be sold to directly, so there are questions over whether some audiences will reject the purchase opportunity,” she says.

Doyle advises brands to really think about whether TikTok Shop will advance a marketing strategy. “Brands must only explore social commerce opportunities if it feels aligned with the brand’s profile and products hit the right price point that is currently appealing on the platform,” she says. “Otherwise, it could put consumers off and result in negative brand sentiment. There’s a difference between ‘reacting’ and ‘responding,’ where the former is knee-jerk and the latter is a strategic move.”

She tells marketers to adopt a test-and-learn approach before jumping in head-first to integrating social commerce.

“Ultimately, TikTok Shop is a bet on future behavior, so some brands may currently see it as a risk. But brands that make the first move stand to gain the most, setting themselves apart from competitors and gaining valuable learnings in the process,” she says.

Ryan Detert, chief executive of Influential, says TikTok Shop’s early success indicates its potential to be a valuable tool for brands. “TikTok’s impact on consumer behavior is undeniable and TikTok Shop will reshape the shopping landscape,” he says.

However, success on TikTok Shop hinges on engaging content, trending topics and educational posts, says Detert. “Content that prominently features products and aligns with trending songs, sounds and filters is most likely to resonate. Higher performance can be achieved when linking products to top TikTok-native trends,” he says.

Here are Detert’s five tips for leveraging TikTok Shop:

1. Craft engaging content: “Prioritize engaging content, highlight products for virality.”

2. Ride the trend wave: “Leverage popular TikTok trends like songs, sounds and filters. Trends can catapult your shoppable posts to the FYP.”

3. Product launch opportunities: “Use TikTok Shop for product launches, create anticipation and excitement around new releases.”

4. Educational content works: “Show your products in action! Explain all the problems your product solves.”

5. Optimize your shoppable posts: “Keep videos between 30 and 45 seconds, showcase product usage, work with top influencers with high CTRs, add clear CTAs and use emojis to point to the buy button.”