As consumers grow wary of Facebook and other social media giants, new platforms are gaining traction. One social media platform picking up steam among consumers in the U.S. is the popular Chinese video app, TikTok.
Formerly known as Musical.ly, TikTok is a social media platform that showcases short, user-generated videos, often featuring lip-syncing, pranks or comedy. Despite the U.S. government’s security concerns over TikTok, the app generated 123.8 million downloads in the U.S. and consumers spent 85 million hours on the short-form video app in 2019, up from 15 million during the same time last year.
With the need to grow its revenue base, TikTok has been experimenting with social commerce in the U.S. In this article, we’ll take a look at TikTok’s new social commerce features.
More from PostFunnel on social commerce:
Instagram Shopping and the State of “Native” Social eCommerce
How Traditional Real-Time Marketing Works in 2019
TikTok’s Social Commerce Features
Social commerce is on the rise as consumers use social media to discover products. The U.S. social commerce market will be worth $84.2 billion by 2024 — a compound annual growth rate (CAGR) of 30.8%. In a move targeted at reducing reliance on traditional advertising alone for revenue and grabbing a share of the expanding social commerce market, TikTok introduced two social commerce features to the U.S.:
Hashtag Challenge Plus: This feature allows people to buy products related to a sponsored branded hashtag within TikTok. Grocery chain Kroger was one of the first retailers to use this feature. The brand’s #TransformUrDorm campaign encouraged college students to show off their decorated dorm rooms. When users tapped on the sponsored hashtag, they were led to a dedicated brand page showcasing Kroger products and direct links to its eCommerce channel.
Shopping Links in Bios and Videos: TikTok is presently running beta tests that let some U.S. influencers add clickable links to their bios or product pages in their videos. These links direct followers to eCommerce sites or any other destination. While it’s unclear whether there’ll be an official roll-out, TikTok’s new shopping features have the potential to make the platform lucrative for influencers and enhance product discovery.
Why Bother About TikTok?
If you’re wondering why you should bother with TikTok’s new social commerce feature when you’ve barely caught up with navigating Snapchat and YouTube, one strong reason is – Generation Z.
The youngest, and the largest generation in American history, Generation Z, comprises 27% of the U.S. population. Following Generation Z’s appetite for short-format, authentic and entertaining content, TikTok is the go-to app for the digital-savvy generation.
More teenagers are likely to use TikTok as Facebook and 69% of the app’s users are between the ages of 16 and 24. This makes TikTok enticing for brands searching to build cultural relevance with Generation Z who spend $44 Billion annually and influence a total of $600 Billion in household spend.
Due to the 54% of Gen Z who tend to use social media to research purchases and discover new brands, TikTok’s in-app shopping features have the potential to ease mobile transactions and turn engagement into sales. TikTok has already proved to be great for driving sales. Beauty brand Marc Anthony, saw a 60% jump in sales as TikTok users started to share viral videos of themselves using its products in mock commercials.
Another reason why TikTok’s social commerce features are a big deal is due to influencer marketing. As vehicles for discovery, influencers play an essential role in social media marketing. In fact, 17% of Gen Z and millennials from the U.S. have made a purchase inspired by an influencer or celebrity post on social media.
Consequently, TikTok’s new link in bio and video feature opens up monetization opportunities for influencers as they can now refer their users directly to their website or other eCommerce stores. Currently, there is no established way for TikTok influencers to make money on the platform except through brand deals that happen off the platform.
Also, the introduction of social commerce features may make TikTok attractive to brands and influencers as Instagram engagement has recorded low levels due to overcrowding. The engagement rate for sponsored posts fell to 2.4% in Q1 2019 from 4% three years earlier. Being a new platform, TikTok hasn’t been overrun with sponsored posts, so users may not be fatigued as they are with Instagram.
Will TikTok’s Social Commerce Experiment Be Successful?
Although TikTok has become the destination for viral short-form videos, the app’s social commerce features may not take off in the U.S. due to reservations consumers have about buying directly on social media platforms. The top concern cited among U.S. internet users about making purchases on social media was security (71%), followed by privacy (65%), and purchase legitimacy (64%).
While it remains to be seen whether U.S. consumers will gravitate toward purchasing products on social platforms, social commerce has begun to blossom. In fact, 18% of consumers have made a purchase directly through social media. Therefore, as more social platforms integrate buying features, user behavior could become more of a commonplace by app users.
TikTok Amid Covid-19
Although TikTok’s foray into social commerce is experimental, it gives the platform a strong foothold if social commerce eventually takes off among U.S. consumers. While all this is preliminary, brands should consider investing in TikTok if they have a young, global, and culture-driven audience.
A couple of ways you can use TikTok to drive engagement and sales include hosting hashtag challenges and partnering with influencers to promote your brand. Whichever way you choose to use TikTok, you should ensure your TikTok strategy is targeted at building a community on the platform and hinged on user-generated content.
Beyond social commerce, TikTok is proving to be a great platform for educating consumers. Amid the ongoing coronavirus pandemic, the World Health Organization and celebrities are using TikTok to educate the public on good hygiene and best practices.
For example, Mariah Carey posted a video of her and her kids washing their hands to “Fantasy (Bad Boy Remix)”. Other celebrities such as Justin Bieber and his wife Hailey, are using TikTok to curb boredom while social distancing by showing off new dance moves. Videos using the hashtag #coronavirus are up to 19.5bn total views on the app, as of Sunday.
Whichever way you choose to use TikTok, ensure your TikTok strategy is targeted at building a community on the platform and hinged on user-generated content.