TikTok is working onto the Next Stage of eCommerce Testing, a Key Shift for the Platform

With competitors rising, TikTok is working to establish stronger monetization processes for its short-form video content, in order to capitalize on its massive potential, and provide more motivation to keep its top users posting to the app, as opposed to moving on to more lucrative pastures.

A key element of this will be eCommerce –  and as reported by Bloomberg, TikTok is currently in the process of evolving its in-stream shopping tools, with a new test of product listings on profiles for some businesses in Europe.

As per Bloomberg:

“TikTok has begun working with merchants in markets, including the UK, on ways they can sell products directly to millions of users within the app, people familiar with the matter say.”

TikTok is reportedly working with brands like Hype to test the new options, before expanding them more broadly, and providing new, direct shopping options within the app.

In a statement, TikTok confirmed the new tests:

“TikTok has been testing and learning with e-commerce offerings and partnerships, and we are constantly exploring new ways” to add value. We will provide updates as we explore these important avenues for our community of users, creators and brands.”

TikTok has been working on its eCommerce offerings for some time – back in 2019, it began testing basic eCommerce links within clips.

It’s since continued to develop its on-platform selling tools, with live-stream shopping events and an integration with Shopify to display product ads in-stream.

These are the precursors to the next stage, with TikTok more recently revealing a range of new eCommerce options coming soon to the app, including ‘Promo Tiles’, which will enable businesses to add customizable sales and promotional alerts, overlaid on their video clips, and ‘Showcase Tiles’ which will better enable creators to directly promote products in their uploads.

Given this, it’s little surprise to see the platform moving to the next stage of testing in Europe, which, as noted, is the logical next phase for the app. Because while TikTok has seen massive success in building a huge user base, it’s still in the early stages of providing comparable monetization tools to its competitors. Which it’s going to need to keep its top stars from drifting off to other platforms, where they could quickly make big dollars through in-stream ads based on their massive audiences, and subsequent view counts.

That’s what happened to Vine, with its top creators realizing that they could make more money on YouTube and Instagram instead. When those big-name stars left, Vine’s active usage plummeted, which eventually lead to a full shut down of the app.

TikTok is more advanced than Vine ever was, and it has the added learnings from the success of the Chinese version of the app, Douyin, which now generates the majority of its revenue from eCommerce. Indeed, Douyin reportedly generated more than $US77 million from eCommerce sales alone in 2020, which, in partnership with top influencers, would provide significant earnings potential for TikTok as well, which is now on track to become the next billion-user platform.

In a recent overview, TikTok’s parent company ByteDance noted that it aims to facilitate more than $185 billion of eCommerce annually by 2022.

Given this, the shift towards eCommerce makes perfect sense, and that will open up a range of new promotional opportunities, and provide more means for brands to connect with the app’s engaged users, and promote their products direct to this audience.

This is a massive area of opportunity for the platform, and it’s worth all marketers keeping tabs on how it progresses, and what the implications will be for businesses as these new promotional options evolve.

We’ll keep you updated on any progress.