We live in a time in which digital transactions are becoming a major force. They’re transforming the shopping world so much, that many high-street stores have fallen victim to the growth of digital innovation and transformative e-commerce trends and online stores. Social media platforms are emerging as powerful tools through which products can be marketed (and sold), and they are seen as strong indicators of consumer behaviour and demand.
Among these platforms, TikTok has risen to prominence as a global sensation, captivating millions with its short-format, visually engaging content. Aside from being an entertainment hub, TikTok has evolved into a growing marketplace, with its own TikTok Shop. The blending of social media and e-commerce highlights the strength of the digital age. It’s redefining how we find, engage with, and purchase new products.
TikTok has a vast user base from all over the world and has managed to capitalise on this by integrating shopping into its platform. TikTok Shop has created a new shopping experience for users in which brands can showcase their products in dynamic, bite-sized formats, allowing viewers to make purchases with ease.
We’ll be taking a look at some of the latest TikTok Shop statistics and trends and assessing factors such as user engagement, conversion rates, and product virality to see how TikTok Shop has become such a new success. Our discoveries may also highlight the strong connections between social media, e-commerce, and consumer behaviour.
- 71.2% of TikTok shoppers said they made a purchase when they found something of interest in their feed or Stories, etc.
- 58% claimed they used TikTok as a source of shopping inspiration.TikTok was the #1 most-downloaded app in Q1 2022, with 3.5 billion downloads in total.
- TikTok has over 1 billion monthly active users.
- 18% of marketers currently use TikTok for marketing purposes.
- 55% of TikTok users have bought something from a brand after seeing their products on the app.
- 50% of TikTok users have made a purchase after watching a TikTok Live.
- TikTok Live prompts 50% of users to buy something.
What is TikTok Shop?
TikTok Shop is an online marketplace and e-commerce platform that operates within the TikTok app. TikTok Shop integrates with the TikTok platform’s short-form video format. Users can shop directly from a Live by browsing the shopping basket icon or by tapping a pinned product. They can also purchase products directly from an in-feed video by tapping the basket icon and/or product link. Or, users can shop directly from a brand or account and get access to products in the TikTok app. These ways of purchasing offer users new ways to discover, shop, and interact with brands.
TikTok Shop is designed to bridge a gap between e-commerce and entertainment, making the most of a large and highly active user base, and the many different types of content that are created using the TikTok app. Users can explore a curated selection of products from various categories, including fashion, beauty, electronics and more, all presented in a visually engaging manner through imagery and/or short video clips.
TikTok Shop collaborates with influencers and users to create absorbing and engaging content that aims to make a shopping experience more entertaining, fun and interactive. Key features of the TikTok Shop include personalised recommendations based on users’ browsing history and their preferences, social features that enable users to share their favourite product finds, and followers, which help brands to cultivate a following of their products.
For brands and sellers, TikTok Shop helps them to connect with an audience that is digitally-focused. Brands can jump on the back of trends, viral videos and user content to boost their visibility online and brand appearance.
The power of TikTok shop for marketing
Sites like TikTok have transformed the way shoppers interact with retailers. By increasing engagement, building relationships and creating direct connections through followers, social media is becoming a major hub in which many consumers are placing transactions. TikTok has become not only a place for social media content but a large platform for what is known as ‘word of mouth marketing’.
Once smaller brands have made it big thanks to exposure on TikTok – an example of this is Little Moons, which saw sales rocket after a frenzy created on TikTok, with a 1300% increase in sales and 6.7 million impressions.
Hashtags such as #tiktokmademebuyit create a buzz around trending new products, which helps to drive sales further. According to Deloitte, companies that use social media platforms for commercial reasons see $20 ROI for every $1 spent.
In 2022, TikTok’s sales increased 477% to £828 billion. So with this in mind, exactly how many people are using TikTok Shop to encourage this growth?
How many people are using TikTok Shop?
Data shows that 5.7% TikTok users made purchases on the app in 2020, and this is expected to reach 27.3% in 2023, and 39.9% by 2026.
TikTok had 1.4 billion monthly active users in 2022, and is expected to reach 1.8 billion by the end of 2023. The company greatly increased its revenue over the last few years, with an estimated $9.4 billion revenue in 2022, which is a 100% increase year-on-year, as the graph below indicates.
In China, TikTok is accessed by over 780 million users daily, and the TikTok app has been downloaded over three billion times. It’s fast becoming the place to shop, as ChargedRetail suggests, 10% of UK shoppers have used TikTok shop to make an online purchase.
How social media impacts shopping decisions
One study discovered that 30% of shoppers now begin their shopping research and purchase journey on Instagram, while 18% start on Facebook and 7% begin on Snapchat.
36% (over a third) of UK shoppers claim that they have purchased clothes in the last 12 months after clicking on an advert placed on social media, or after viewing a social media post. 54% claimed that they planned on making more purchases this way for clothing and other items over the next six months.
The percentage of TikTok users making purchases on TikTok Shop
Just under half (49%) of TikTok users claim that the platform guides purchase decisions and that users’ positive experiences can greatly influence other users and their buying choices. 55% of TikTok users claim to make purchases after being exposed to a brand. Seeing products being used in demonstrations is a major factor in decisions to make a purchase, with influencers driving sales and product visibility. 39.1% of users actively look for opportunities to shop on their feeds.
58.2% of TikTok users claimed to use the platform for shopping inspiration and research before making a purchase. 48% use TikTok to gather information about a product before making a purchase, including watching videos, assessing other users’ reviews and experiences, and looking at product descriptions. 45% of TikTok user purchases are driven by influencer collaborations and content.
More than a third of TikTok users buy something they see from the platform, and 37% immediately purchase something after discovering it on the app.
The number of items sold on TikTok Shop
It’s hard to say exactly how many items are sold on TikTok Shop at any given time, as the numbers of sellers and the products they are retailing constantly change and evolve. To launch a storefront on TikTok, technically sellers only need one product, but they can have up to 2,000 products if they wish.
With TikTok having over a billion active monthly users and 150 million in the United States alone, and with users spending an average of 95 minutes a day on the app, it’s fair to say that there’s potential to sell a vast number of products and achieve a high turnover on TikTok Shop. Brands that are actively trading on TikTok Shop can receive 200,000 content views per post.
One way to assess the number of items sold on TikTok Shop is to look at some brands that have been successfully trading on the platform and see how many items they have sold.
Made by Mitchell
Beauty brand Made by Mitchell sold mystery beauty bundles on TikTok Shop, which quickly went viral. The goal was to build brand awareness and to connect with a young audience. Users would purchase the bundle and open it while being filmed, revealing to the world what they received in the package.
There were mixed reviews regarding the contents of the bundles, with some buyers feeling disappointed because they received makeup in colours they wouldn’t normally use. Despite this, the product bundles had so many mixed reviews; this drove more users to purchase the bundles to find out more for themselves and make up their own minds. Videos with the hashtag #madebymitchell received 102 million views, and the brand sold more than 83,000 products on TikTok Shop.
Another beauty and lifestyle brand, P. Louise, also sold a make-up product ‘lucky dip’ bundle, with every bundle sold having a chance of containing the brand’s ‘goal diary’, which was worth more than twice the price of the bundle itself. Videos of people unboxing the bundles went viral, with users commenting positively on the products they had received. This led to 100,000 product sales for P. Louise on TikTok Shop.
How much money can you make from TikTok Shop?
Again, this is a tricky question to answer, because every brand’s performance on TikTok Shop will be different. Having said this, every brand has huge potential to make a lot of money from TikTok Shop. TikTok is very popular as a platform, with total user spending on the App Store and Google Play surpassing $824 million in the fourth quarter of 2021.
When a business first sets up TikTok Shop, it will have a shopping tab icon on its profile, which looks like a shopping bag. Customers can browse and choose products within TikTok, and then buy them through TikTok, or be transferred to the brand’s own online store or website for checkout.
Kylie Cosmetics, owned by reality TV star Kylie Jenner, became one of the first brands to let customers buy its products directly on TikTok, as the company had more than 3.5 million followers on the platform.
As Jenner put it herself: “I built my business on social media; it’s where my fans go first to look for what’s new from Kylie Cosmetics. I have so much fun creating TikTok videos, and I love sharing posts of my fans using the products. That’s why I’m excited for Kylie Cosmetics to be one of the first to let customers shop directly on our TikTok!”
Jenner used $250,000 from earnings as a model to launch her own line of lip kits, producing 15,000 that immediately sold out post-launch. These soon went viral, and various other successful product launches followed. Jenner sold 51% of Kylie Cosmetics to Coty Inc in 2020, making $540 million pre-tax from the sale. It’s fair to say, that if used in the right way, and with enough followers, TikTok can make or break the success of a brand.
Obviously, not all earnings from TikTok Shop are at this level, and they can be influenced by different factors. Kylie Jenner made such a fortune from TikTok because she had a high number of followers on the platform.
Creating engaging content, affordable product prices, reviews, partnerships with influencers, and linking a product to a trend can all help to boost sales and turnover. There isn’t an exact formula that teaches someone how to do this – it all depends on the seller, their brand, and user relationships with that brand.