Many things that were popular decades ago re-emerge and become current trends, and TikTok is banking on the same happening with the type of retail commerce popularized by Home Shopping Network and QVC in the 1990s, but on consumers’ phones instead of their television sets.
Studio Time
According to reports, TikTok plans to provide facilities in several U.S. cities, with Los Angeles mentioned prominently, where creators can access studios to host livestreams in a more professional environment and sell products.
The facilities will reportedly include multiple studios, with the ability to accommodate dozens of creators each day, as well as professional cameras and lighting.
TikTok is reportedly considering working with agencies on the initiative, which may include shipping products directly to the new sites, and it is also tinkering with the idea of charging a membership fee for creators to use the facilities.
There was no word on other cities being considered, but Los Angeles being home to Hollywood and its plethora of actors, comedians, and musicians made it a natural choice.
Videos originating from the site will reportedly give viewers the option of clicking a link or swiping over to the application’s shopping tab to purchase featured products, or viewers can wait until the video concludes and see and buy all items that were featured in the livestream.
Pulling a 180
TikTok said during the summer of 2022 that it was pulling the plug on plans to bring live shopping to Europe and the U.S., citing poor results with its efforts on that front in the U.K.
“The market just isn’t there yet,” a TikTok spokesperson told Financial Times at the time. “General consumer awareness and adoption are still low and nascent.”
And TikTok was far from the only platform to encounter bumps in the road to live shopping, as Meta shuttered the feature on Instagram last March to focus on Reels, saying that the option did not catch on when pandemic-related restrictions began to lift.
So, why the change of heart?
Enter TikTok Shop
The official rollout of TikTok Shop in the U.S. last September is seen as a catalyst for the company’s renewed interest in live shopping.
“I believe that the launch—and, thereafter, widespread adoption—of TikTok Shop laid the groundwork for TikTok redirecting focus back onto the potential of livestream shopping,” Open Influence Senior Creative Strategist Zach Honer said. “The immense success of the Shop feature has been extremely effective in quickly establishing e-commerce as a native aspect of the platform for U.S. audiences. Today, it isn’t uncommon to hear, ‘I finally caved and bought something from TikTok Shop,’ from friends and family, or even as an attention-grabbing hook in posts that also include TikTok Shop links to the product they’re referring to as having ‘just purchased.’”
TikTok Shop enables creators to promote products via in-feed and live videos, as well as to curate custom collections on their profile pages, raise awareness of their offerings via Shop Ads, monetize their videos via an affiliate program, and tap into a logistics offering under which TikTok stocks and ships the goods.
On the consumer side, viewers can manage all of their orders via a single Shop tab on the app and check out securely via third-party payment platforms.
In fact, the #tiktokshop hashtag totaled over 5 billion views during a 30-day period ending in late November 2023.
Live shopping isn’t the only iron in TikTok’s social commerce fire. The platform recently announced a partnership with Walmart Connect, aimed at combining the retail giant’s brand equity and proprietary first-party data with the video-sharing app’s native in-feed video ad formats and user base heavy on the Generation Z and millennial demographics.
Other initiatives TikTok is reportedly planning to test in 2024 include food delivery, as well as developing characters generated by artificial intelligence to host livestreams, with the latter having proven popular in China.
And on the live video front, TikTok began testing Sub Space, a space where creators of live videos can interact directly with their paying subscribers.
“A fusion of word of mouth, digital, and almost QVC-like marketing, TikTok Shop has become an impossible-to-ignore part of TikTok and users’ For You pages—TikTok even admitted to deliberately pushing content that includes a Shop button algorithmically,” Honer said. “While many are upset by this shift, claiming that TikTok Shop posts are an unwelcome interruption in their FYPs that used to provide nonstop, unbridled entertainment, it’s clear that TikTok Shop is here to stay.”
TikTok Shop has made its presence felt, maybe a little too much for some people, but its early progress is helping pave the way for this next stage of live shopping.
According to TikTok:
- 39% of respondents to its recent survey have discovered new brands and products on the platform.
- 58% have found new products through TikTok ads.
- 47% purchased items they saw on TikTok.
- 55% share products they like with family and friends.
Inspiration From China
While live shopping has been slow to catch on in the U.S., the opposite is true for China, which happens to be home to ByteDance, TikTok’s parent company.
Accenture found in a January study that eight out of 10 social media users in China have made purchases via social commerce, and TikTok research found that 45% of online shoppers in the country were expcted to make purchases via livestream last year.
Douyin, ByteDance’s TikTok-like app for China, reportedly boasts an annual shopping business of $200 billion, driven by live in-stream video, and the company’s facilities in Shenzhen, China, are likely the inspiration for those planned by TikTok.
What Should They Stream?
Ideas for how creators can use the livestreaming time they may see if TikTok proceeds with its plans include:
- How-to videos, product demonstrations, or tutorials, so that viewers can see the product in action and creators can provide their takes on how best to use it.
- Livestreaming is the ideal platform for events such as giveaways, product launches, or special collections.
- Combine forces and include several brands, creators, and products in the same livestream.
Conclusion
“Livestream shopping is undoubtedly the next phase in the evolution of TikTok e-commerce in the U.S.,” Honer said. “These streaming studios may be a necessary tactic in ushering in this new livestream shopping era and proving to audiences that commerce and entertainment can still go hand-in-hand.”
