Social Media

The Benefits of TikTok Shop: Why Your Business Needs This Social Selling Channel

Jun 4, 2024 | By akber

To say TikTok has taken over the world is probably an overstatement… but only a little bit of an overstatement. In just a few short years, TikTok has gone from a social media outlier with a name that sounds like a Ke$ha track, to a global online community with hundreds of millions of active users around the globe.

Something with this much reach is always going to be a marketing goldmine, but TikTok can be more than this. With TikTok Shop, businesses are not only boosting their visibility and fostering engagement – they’re achieving direct sales too… lots of direct sales.

To understand this a bit more, we’re going to be looking at the top benefits of TikTok Shop and exploring the advantages that are making this a must-have for any business’s social media strategy.

Why TikTok’s Active Community Makes TikTok Shop Essential

Facebook is still top of the social media tree for monthly active user figures, with YouTube and Instagram second and third. Excluding WhatsApp, TikTok takes fourth spot. Not Twitter/X, not Snapchat… TikTok. In fact, if we combine TikTok’s monthly active users with its Chinese sister app Douyin, it moves up to third.

This is one of the biggest and most obvious benefits of TikTok shop – the fact that you’re dealing with such a vast number of people. As a marketing channel, this is not something you can afford to ignore.

Of course, not every TikTok user shops on the platform. Many of them are just there for the quirky videos and viral dances. But plenty of users are shopping on the platform, and that number is growing. As of March 2024, 55 million Americans had bought something direct from TikTok. 

TikTok Shop Provides Massive Revenue Generation Potential

In 2023, the gross merchandise volume for TikTok Shops was valued at $11.09 billion. Over here in the United States, TikTok Shop didn’t launch until September, but still managed to see $363 million in sales in only its first two months of operation.

Whether you’re selling on a global scale, or just here in the U.S., we’re talking big numbers. Adding TikTok Shop to the marketing mix has been a real game changer for plenty of businesses already, and it’s only been around for a few months!

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TikTok Users: An Audience That Spends Big, and Spends Often 

Much of this revenue generation is driven by user behavior. TikTok users, it seems, like to splash the cash… and they don’t mind acting on impulse.

Around 37% of TikTok users are in the top third of social media shopping spenders, which puts the channel far ahead of most of its competitors. Even if TikTok users don’t buy directly, it appears the social channel still has an influence. When a user visits TikTok as part of their buying journey, they spend, on average, 1.6 times more.

While Instagram Ads are still the biggest drivers of impulse purchases, TikTok is not far behind. And around 89% of surveyed TikTok-ers said they had purchased a cosmetic product or beauty item after they’d seen it on the platform. More than 71% of users said they had purchased something they “stumbled upon” on the platform, showcasing the awesome conversion power of TikTok.

TikTok Shop Delivers Big Results in Top Markets

All those gross sales figures and total revenue numbers are very exciting, but let’s just take a minute here. The thing about gross sales figures is that they never quite tell the whole story – your local auto shop might be doing a roaring trade, but they’re not going to be breaking into the cosmetics market any time soon. It’s not just how much is being sold… it’s what’s being sold.

Beauty and personal care items are far and away the most commonly sold products on TikTok Shops, making up 22.50% of the gross merchandise volume. Womenswear and underwear come next with 12.56%, and menswear and underwear follow with 8.06%. Not too far behind, you’ve got food & beverages, and health products, at 6.85% and 5.42%, respectively.

If you’re working in one of these markets, TikTok Shop really isn’t something you can ignore. You’ve got an engaged audience ready and waiting to buy your products. If you’re selling a different kind of item, you might still not want to write TikTok off just yet – this is a flexible platform, with plenty of room for diverse sellers.

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TikTok Shop: A Mobile-Ready Platform for E-Commerce Success

If you’re selling products online, you need a strong mobile strategy. In 2024, 31% of ecommerce purchases are made via mobile devices, while 35% of U.S. consumers say they only use their smartphone or tablet when they shop online. 

So you need a channel that matches with this mobile-first approach, and TikTok fits the bill perfectly. Back in Q4 of 2023, TikTok’s iOS app alone generated $65 million here in the U.S. Over in China, the total was $303 million, demonstrating just how much potential there is for real mobile engagement. Factor in revenue generated on other mobile operating system apps, like Android, and we’re talking about a lot of money.

Bear in mind, this is $65 million  in revenue, not in direct TikTok shop purchases. So we’re including things like advertising here too. However, as TikTok Shopping gathers pace, this is likely to become an increasingly important revenue driver in the future.

Why TikTok Shop is the Channel of the Future for Businesses

And talking of that future… what does it look like? Well, it’s Gen Z who are going to shape this future, so it all depends on them.

Right now, Gen Z’s best-loved social media platform is TikTok, beating the millennial favorite Instagram back into second place. In the U.S., more than 47% of TikTok users are under the age of 30, and 25% are under 20. The creators themselves are young too. On average, a top 10 TikTok creator is likely to be 24 years old.

There are plenty of older TikTok users too, and this is a broad platform with a great deal of scope. But for brands who want to stay ahead of the curve, building an engaged audience of younger people, it’s ideal.

Maximize Your Success with TikTok Shop’s Internal Support

It’s not just your business that benefits from TikTok Shop. TikTok does too. This is a big revenue driver for the social media giants themselves, so they want to make it as easy as possible to leverage all the advantages TikTok has to offer.

This means you’ve got a fairly easy ride if you want to give the platform a try for yourself. The TikTok Shop Academy gives you the lowdown on how you can get started, while the TikTok Shop Seller Center offers powerful analytics to help you keep on top of all your business’s data.

You can even get TikTok to handle the shipping of your products themselves, similar to Amazon’s FBA selling options. Of course, just like FBA, there’s a fee for this.

To really get the maximum benefit from TikTok Shop, you might need a bit more guidance than just the platform’s generic support. But the fact these options even exist shows how committed the TikTok team is to making their shopping features work, which is good news for businesses preparing their own TikTok Shop strategy.

TikTok Shop: A Natural Setting for Influencer Partnerships

Influencer marketing is far older than TikTok. But sometimes it takes a new kid on the block to shake up the scene and take it in a new and exciting direction. TikTok’s creator and video remix features allow influencers to craft engaging videos for their audience, and this audience has responded in a big way.

Influencers represent some of the most popular creators on TikTok, often with more than 100 million followers. Marketers are certainly aware of this, and around 61% use TikTok influencer marketing within their own promotional strategies. 

But you could choose YouTube or Instagram for your creative influencer partnership, so what’s so special about TikTok? Putting aside the fact that most of the biggest influencers around the world are found here, the platform also sets itself apart in a number of other ways.

  • TikTok offers its own Creator Marketplace, making it even easier for brands to connect with the right influencers in their niche.
  • On top of this, TikTok provides a Creator Fund, helping new talents monetize their videos, find a new audience, and transform themselves into genuine influencers.
  • TikTok’s algorithm is also geared to helping new creators find their feet, and this leaves the door open for micro-influencer partnerships.

While TikTok still lags behind YouTube and Instagram for marketers looking to form fruitful partnerships with influencers, the arrival of TikTok Shop could be changing this. Brands are certainly highly excited about the potential of this platform, even offering TikTok exclusive product drops to energize their audiences and encourage purchases.

Choose HireInfluence and Get the Very Best from Your TikTok Shop Strategy

TikTok Shop has arrived, and it looks like it’s going to be sticking around. Growing user numbers, coupled with those juicy impulse purchase figures, are transforming TikTok from a fun and quirky promo tool to a crucial revenue stream.But to reap all those TikTok Shop benefits for yourself, you might need a bit of a helping hand along the way. With our customized creative campaigns, you can get the very best from influencer marketing and realize the advantages of TikTok Shop for your business. Reach out to our team to discover more.

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