TikTok Popularizes Products. Can It Sell Them, Too?
TikTok wooed marketers from companies like Madewell, H&M and Gucci last Wednesday as part of New York Fashion Week, transforming the stylish East Village restaurant Cathédrale with a video wall showcasing fashion trends like “little luxuries” and tall mannequins wearing TikTok-inspired styles.
TikTok has cemented itself as an essential advertising venue for brands aiming to reach its young users. But at the party, the marketers were abuzz about TikTok’s efforts to sell products from the app itself.
The reason: After nearly a year of testing, speculation and some internal upheaval, TikTok this week is rolling out TikTok Shop for all users in the United States. The company will expand the rollout of a Shop button on the app’s home screen, which sends people to a marketplace, and drive traffic to videos that contain Shop buttons for specific products. Both enable users to buy products in a few clicks without leaving the app.
E-commerce is a significant bet for the company, which is hoping to translate the app’s power as a cultural trendsetter into another big new revenue stream. But it is a venture that other popular social platforms, including Instagram, have not succeeded with in the United States.
To make it a hit, TikTok said, it is actively driving videos with shopping buttons into users’ feed. The company is also, for the time being, giving generous discounts and coupons to users who shop and forgoing commissions from many sellers. TikTok said that it had already signed up 200,000 sellers to TikTok Shop and that more than 100,000 creators could make videos and livestream with shopping buttons.
“We have a very aggressive plan to make a splash in the industry and make sure that people out there understand that TikTok is a place for shopping,” Nico Le Bourgeois, one of two executives overseeing TikTok Shop in the United States, said in an interview last week. “We’ll be very present for Black Friday and Cyber Monday through a combination of traffic, free shipping and deals.” He also said TikTok Shop would run ads on the web and elsewhere.
On Monday, TikTok’s Shop button led to a page in the app with a vast array of items. Some were bizarre, like a 27-cent palm-size foldable chair and a $5.52 ice crusher with a hand crank. But there was also a section for verified brands like Revolve, Benefit Cosmetics and Otterbox, and products like Air Jordan sneakers.
In main TikTok feeds, creators are increasingly pitching products in videos that bear an orange Shop icon and the label “eligible for commission.” People can buy the products with Apple Pay, PayPal or a credit card.
The Shop button, which now appears to 40 percent of users on the main bar of the app’s home screen, started rolling out in August and will reach all of TikTok’s 150 million U.S. users by early October.
An executive overhaul last month led to questions about the direction of U.S. e-commerce at the company. The person who oversaw the efforts, Sandie Hawkins, left the company for personal reasons, according to an internal memo. Mr. Le Bourgeois, who joined TikTok from Amazon, and Marni Levine, a retail executive who was most recently at Meta, replaced her in the role. They report to Bob Kang, the global e-commerce chief of the Chinese company ByteDance, which owns TikTok.
The company seems to have moved away from an initial focus on promoting shopping through livestreams, a huge industry in Asia that has not found the same resonance in North America, according to several marketers.
Craig Brommers, the chief marketing officer of the retailer American Eagle, said that when the chain tested live shopping events on TikTok in the past year, viewership was “well under what brands are experiencing in Asia-Pacific.”
“The initial hypothesis was that live shopping would translate to North America — we haven’t seen that success,” Mr. Brommers said. He said his company was keen to learn about other tools from TikTok Shop under its new leadership, especially if it could make it “seamless” for Gen Z shoppers to, say, watch TikTok creators in American Eagle jeans, then buy them in a few clicks.
Mr. Le Bourgeois and Ms. Levine said videos with shopping buttons from brands and creators were now TikTok Shop’s main sales driver, though they said live shopping was still a priority and growing in the United States.
Creators who want to sell products from TikTok’s marketplace must choose from the assortment of items TikTok has available. Alyssa Pannozzi, an indoor cycling trainer and TikTok personality with more than 200,000 followers, said that when she looked at the sea of products, many came from “foreign shops that have a hodgepodge of items.”
The company has already run into accusations that it has enabled sales of shoddy or copyright-infringing products and has drawn comparisons to fast-growing Chinese shopping apps like Shein and Temu, which have flooded the market with cheap goods mailed straight from China.
TikTok’s executives pushed back against such comparisons, saying it viewed itself more like Amazon or China’s TMall and was using technology and manual moderation to enforce its policies, requiring “robust verification” for new sellers. The company said more than 90 percent of TikTok Shop’s sellers were U.S.-based, and Mr. Le Bourgeois emphasized that a slew of major brands like Benefit, Olay, L’Oreal and e.l.f. had joined or were planning to join TikTok Shop.
Ms. Pannozzi, 37, said she was invited to join TikTok Shop a few months ago but largely ignored it until July, when she saw that her feed was flooded with QVC-style pitches and wondered if she could make money from those. She has tried to feature items from sellers with positive reviews that suit her followers — like hair elastics and water bottles — finding major success a few weeks ago with an advertorial video that passed more than two million views and led to over 600 sales of a Stanley-style tumbler. She said she expected to earn thousands of dollars in commissions and had joined an agency’s invite-only program for TikTok Shop creators.
“Now, I’m getting a bunch of inquiries every morning when I wake up,” she said. “TikTok to me now is completely different than it was a couple of months ago — just the whole vibe of it,” she added.
Paul Tran and Lynda Truong, the married founders of the South Korean skin care company Love & Pebble, attended TikTok’s event with advertisers last week. They said in an interview that joining TikTok Shop this summer was “life changing,” and that TikTok’s offers for shoppers were generous.
Mr. Tran said the average price for the brand’s core product — a “beauty pops ice mask kit” for the face — was about $39. While it was often selling for $7, or even $11, less on TikTok because of the app’s discounts, he said he was still earning the same profit as he would from the standard price. Mr. Tran said he was not sure when TikTok might start taking a commission.
Ms. Levine said that TikTok could not elaborate on its future commission model but that it was “focused on getting the first of all the sellers to add their inventory to the platform.”
“The name of the game is to keep people on the platform as well, whether that’s through shopping, engagement of videos, whether it’s through dances,” Ms. Levine added. “It’s always about keeping people engaged and being a part of the community.”
Contact Sapna Maheshwari at email@example.com