Why TikTok Shop sellers could be hit harder than creators by a ban of the app in the US
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- In less than a month, TikTok could be pulled from US app stores due to a federal divest-or-ban law.
- Merchants who sell on TikTok Shop may struggle to find an alternative if the ban goes through.
- TikTok Shop offers a unique blend of social tools, e-commerce tech, and a large audience.
If TikTok is pulled from US app stores in January due to a divest-or-ban law, many of its creators will be fine. However, its e-commerce sellers may have a rougher road ahead.
Many TikTok creators have spent years building up audiences on similar apps using features like YouTube shorts and Instagram reels. For some merchants who sell goods on TikTok Shop, there isn't an obvious alternative.
"With TikTok, we've had the first real foray into building an ecosystem that ties in entertainment and live shopping together; a full-service ecosystem that brings in the creators, the affiliates, the products, and the brands altogether," Julian Reis, CEO of the social-commerce agency SuperOrdinary, told Business Insider. "Previously we had a lot of smaller platforms and smaller surface layer applications that were enabling live shopping on other people's platforms."
Other platforms, like the live-shopping app Whatnot or affiliate-marketing platform LTK, offer robust tools for social commerce. Flip built an app that's basically a shopping-only version of TikTok. Shopify offers a variety of tools for merchants to integrate into social apps, and Meta made a deal with Amazon in 2023 to make Instagram and Facebook posts more shoppable.
But none of these products offers the same breadth of services in one place as TikTok. TikTok Shop even has its own app store, bringing it closer to super-app status.
TikTok invested heavily in social-shopping tech before it was obvious the move would pay off in the US. TikTok's push into e-commerce initially angered many users, but the company continued to lean into the initiative as it sought to train its audience to buy in a social feed. It also built out infrastructure, such as adding six warehouses in the US to support order fulfillment and logistics, its head of US operations Nico Le Bourgeois told BI in October. That level of investment and boldness is tough to replicate.
"We are on every platform, but TikTok is the primary platform because they're by far the most advanced social commerce marketplace that we have in the US today," Max Benator, the CEO of the social-shopping firm Orca, told BI.
TikTok has shown a unique commitment to making social commerce grow in the US. While some of its peers have pulled back on shopping features, TikTok has charged forward. Its drive to make social shopping take off was likely influenced by the success of its Chinese sister app Douyin, which drives billions in annual sales. The effort appears to have turned a corner, and TikTok is now pulling in billions in sales, including over $100 million on Black Friday alone.
Right now, TikTok is central to the social-shopping marketplace in the US. But if the app is banned next month — an outcome it's challenging before the Supreme Court — a competitor app like Instagram or YouTube might try to replicate some of its efforts to fill the void.
"Once the consumer habit is to buy through livestreams, it really doesn't matter what platform they use," William August, CEO of Outlandish, a company that works with TikTok Shop brands and others on livestream selling, told BI in November. "If TikTok does get banned, I don't think these people are just going to stop shopping through livestreams. I think they're going to move to another platform."