‘TikTok Made Me Buy It’ Is Only the Beginning

This entry was posted in Press on .

Original Article: Built In

In February of 2021, Los Angeles entrepreneur Sixuan Li guest-hosted a live-streamed event on the popular Chinese shopping platform Taobao alongside Chinese social media influencer Huan Wei. Commonly known by her stage name Viya, Wei has been dubbed the “live stream queen” and is known for her ability to sell just about anything on social media, no matter the price.

During that February event, Wei managed to sell $6 million worth of products in just three hours, with 20 million people tuning in, Li told Built In. “But that’s just one ordinary day for her,” she added. Indeed, in just one 14-hour period during the Chinese shopping holiday Singles’ Day, Wei sold $1 billion worth of goods.

Nowhere is the power of social commerce, the blending of entertainment and shopping through social media content, more apparent than in China — particularly when it comes to livestream shopping. According to eMarketer, social and livestream shopping accounted for 14 percent of the country’s $2 trillion e-commerce market in 2021, and some experts predict the social commerce market in China will be worth about $1 trillion by 2025.

Right now, the space is dominated by apps like WeChat and Pinduoduo, the Chinese equivalents of Facebook and Amazon, respectively. And Douyin, the Chinese equivalent of TikTok that is owned by the same parent company, ByteDance, developed commerce functionality just two years ago and has reportedly already reached more than $150 billion in gross market value.

So far, U.S. apps aren’t anywhere near this successful, but that could begin to change. Motivated by the successes in China, U.S. social media apps have started incorporating shopping features directly into their apps. YouTube has begun testing out shopping features in Shorts, its short-form video product, and Pinterest rolled out several new shopping features for retailers. Meanwhile, TikTok recently made its live shopping feature available to U.S. retailers after piloting it in the U.K and Southeast Asia.

By the end of this year, the social commerce market is expected to be worth more than $45 billion in the United States, driven largely by the meteoric rise of TikTok and the surge in investment in influencer marketing across all of social media. And Li thinks this is only the beginning.

“TikTok nowadays in the U.S. or in the West really feels like what Douyin was like back in 2017 and 2018,” she said. “It’s still early in the days, but it’s full of potential.”

Social Commerce Is Quickly Evolving

Social commerce has come a long way in just the last few years. Not too long ago, if you were scrolling through social media and saw a product you liked and wanted to buy, it was up to you to go surf the web to try and find it. Then, platforms like Instagram, Pinterest and Snapchat allowed users to link directly to products, giving people easy access to the product on whatever site it was being sold on. This is still a rather common way for people (especially young people) to shop.

True social commerce “removes the friction from that process” Hana Ben-Shabat, the founder of research and advisory firm Gen Z Planet, told Built In. “You can see something. And if you like it, you can click on it, you can purchase it. You complete the transaction all on one platform.”

Shopping on the top-performing social media platforms today still has some of that friction, and social commerce specifically hasn’t fully gained traction in the United States. Instagram, which has become a commerce giant in its own right — particularly for direct-to-consumer brands — implemented its own shopping tab that allows users to scroll through a feed of recommended products, but it appears to be phasing that out. Fellow Meta subsidiary Facebook is a longtime fixture in the U.S. social commerce space, but Meta recently announced it was laying off 11,000 employees, attributing it in part to the overestimation of the e-commerce boom during the pandemic. The decision came mere months after the company announced it was shutting down its live shopping feature on Facebook due to its lackluster performance.

Still, social commerce is growing in the United States, slowly but surely — a result of a sort of perfect storm of circumstances. The Covid-19 pandemic caused a rapid adoption of both social media and e-commerce all over the world, but especially in the United States. According to global consulting firm McKinsey and Company, we squeezed about ten years’ worth of e-commerce adoption into the first three months of the pandemic. Meanwhile, as big tech companies continue to phase out third-party cookies amid ongoing privacy concerns, advertising on social media is having to be redefined.

So, companies that already had their eyes on social commerce have to accelerate their adoption of it even more now because advertisers “aren’t just paying for eyeballs,” Eric Dahan, the CEO of influencer marketing company Open Influence, told Built In. “They’re paying for conversions and to generate traffic for the site.”

Influencer marketing has become an integral part of the rise of social commerce, where regular people take to social media to push a specific brand, lifestyle or product for a profit. Open Influence acts as a sort of talent agency for the space, but instead of representing the social media influencers themselves, they represent the advertiser.

And Dahan says this has turned into a pretty lucrative business. Now that companies are able to set up shops directly on platforms like TikTok or Instagram, they have more of a direct funnel, bypassing the traditional ad structure and getting straight to the transaction. “Now, the incentive is how do you funnel as much money [as possible] towards that transaction? And influencers are a means of doing that,” he said.


Short-form video tends to be the medium of choice when it comes to social commerce and influencer marketing. This is particularly true for fashion e-commerce, which is very “personality and visuals-driven” said Li, the LA entrepreneur.

That’s why she co-founded VIAVIA, a video-driven fashion e-commerce platform that sells both a curated selection of global fashion brands as well as its own line of Italian-made fashion and streetwear. “It’s like QVC meets TikTok,” she explained. It also has an AI-powered supply chain management tool for fashion brands, helping them to collaborate with their suppliers more efficiently.

To be clear, VIAVIA is not a social media platform. Instead, it partners with content creators who already have a presence on other social media platforms, providing them with training, styling guidance and resources so they can sell more of their products. Essentially, it’s aiming to control the entire lifecycle of social commerce, from helping designers source the materials for a bag, to helping them sell that bag on social media.

“TikTok, Instagram, all these new platforms, essentially have become the new TV. Only they have a way bigger traffic pull,” Li said. “In general, people are the same. We still like to buy things from places we trust and we like, it’s just that the ceiling on social media is way higher than the traditional TV network.”

“TikTok, Instagram, all these new platforms, essentially have become the new TV. Only they have a way bigger traffic pull.”

Of course, you can’t talk about video-first social commerce, or video commerce, without talking about TikTok.

Born out of a merger between ByteDance’s Musical.y and Douyin in 2017, TikTok gained its initial popularity for its proliferation of viral dances and challenges. It was entertainment, pure and simple — a creative and social lifeline during the darkest days of the pandemic. It has since built itself into an advertising juggernaut and a go-to place for the buying and selling of products.

On TikTok, creators can add shop tabs to their profiles, which will sync and display products for sale and allow customers to purchase these products with ease. Creators can also tag products in organic posts. When they add a video to the platform, they can tag specific products, which users can then click on to be taken to the relevant landing page. The app also rolled out a live shopping feature in the United Kingdom and in Southeast Asia, and is gearing up for a U.S. launch as we speak.

While TikTok did not respond to Built In’s request for comment, the company has previously issued press releases stating it is ushering in a new era of marketing with its various creative, branding and commerce solutions, and that it is building for the future of entertainment and advertising. Unlike ads on other social media platforms, ads on TikTok appear just like any other video, so they aren’t always immediately discernible as ads. As such, the company has pushed more brands to work with its content creators to make their ads even more natural, and has even told brands, “Don’t make ads, make TikToks.”

Looking ahead, TikTok’s parent company ByteDance has called the blending of entertainment and shopping the “next major breakthrough.” This can already be seen in China, where Douyin reportedly generated $26 billion of e-commerce transactions in just the first year of offering shopping in its app.

“TikTok came out the gate understanding the value of creators and building around that,” Dahan said. And its format lends itself well to social commerce — particularly when it comes to specific items. “It isn’t brand-driven, it’s product driven,” he continued, adding that this has led to the ongoing “TikTok made me buy it” craze. “TikTok is great for discovery, period. And it’s great for product discovery for anything demonstrable, or that has a true [unique selling point].”


If TikTok is the proverbial vehicle driving social commerce forward, then Gen Z are the ones with their collective foot on the gas.

In the last five years, TikTok has become the dominant app for people born between 1997 and 2012 — a generation defined as the first digital natives, who grew up with things like smartphones and social media as integral parts of their everyday lives. As such, their shopping habits have been transformed by not only the platform’s many shopping features, but also the cultural impact of viral content pushed by trends like #TikTokMadeMeBuyIt. In fact, a recent survey published by consulting firm Deloitte found that 60 percent of Gen Z plan to use social media for holiday shopping this year.

“They grew up with these apps in their hands. For them, it’s really a very natural kind of process,” Gen Z Planet’s Ben-Shabat said. “Just by the default of their being digital natives, and being the major percentage of users on these apps, they are driving the rise of the trend.”

“Just by the default of their being digital natives, and being the major percentage of users on these apps, they are driving the rise of the trend.”

In fact, she attributes TikTok’s ultimate success to its appeal among Gen Z, claiming its quick-hit video format “encourages creativity” in all sorts of ways. “They view themselves as creative individuals and they appreciate creativity. Just look at a TikTok video, and just think about how many skills you have to have to create a good video. You need to have video editing skills, acting skills, dancing skills, storytelling skills. And I think that’s something that Gen Z has an appreciation for.”

She also points to the app’s inherent focus on authenticity as particularly appealing to this generation.

“You can be whoever you are on TikTok. Even if you show a product, you can still be yourself. You can still be silly, you can still be doing it from your bedroom,” she said. “You don’t need to be perfect. There is not that pressure that people feel when they are on places like Instagram or Facebook.”

And these older social media platforms are beginning to feel this generational shift. Just as TikTok has been seeing record growth, social media giants like Facebook and Twitter are in the midst of a major decline, resulting in massive revenue cuts and slashing headcounts.

Of course, this can’t all be ascribed to Gen Z and TikTok, but there’s no denying that the pair have had a major impact. TikTok detracts billions of young eyeballs away from Instagram, Facebook, Snapchat and the like. And, in the world of social media, eyeballs mean dollar signs. These days, understanding and properly responding to the behaviors of Gen Z consumers isn’t just a savvy business model, it’s a matter of survival. And this has fueled the ongoing burgeoning social commerce and video commerce spaces.

“What search or photo was to millennials, video is to Gen Z,” VIAVIA founder Li said, adding that this trend will eventually trickle down to more millennials and even older generations. In fact, that recent survey put out by Deloitte found that, while 60 percent of Gen Z respondents plan to use social media like TikTok for holiday shopping this year, so too do 56 percent of millennials, and even some Gen Xs and boomers.

The Line Between Social Media and Commerce Continues to Blur

Now that it has established a fairly firm foothold in the social commerce space, TikTok is even beginning to encroach on the turf of e-commerce giants like Amazon and Walmart. Per an Axios report based on recent job postings, the company is planning to build its own product fulfillment centers in the United States.

According to more than a dozen job postings, TikTok is looking to build an “international e-commerce fulfillment system” that will include international warehousing, customs clearings and supply chain systems to support both e-commerce efforts both domestically in the United States and across borders. The goal, said one job listing, is to “help sellers improve their operational capability and efficiency, provide buyers a satisfying shopping experience and ensure fast and sustainable growth of TikTok Shop.”

“I think that’s a really interesting play because it allows them to manage quality in the same way Amazon can. They could do prime, they could do same-day shipping. They could better control merchants and what merchants are selling,” Open Influence’s Dahan said. “It’s a really smart play, and I think brands that are early movers on TikTok are going to do very well.”

“It’s a really smart play, and I think brands that are early movers on TikTok are going to do very well.”

And it’s not just social platforms. The shift has inspired e-commerce companieslike Shopify and Amazon to add social features to their platforms as well. Amazon was an early adopter, establishing an influencer program in 2017 and developing “Influencer Storefronts” where creators can include links to items they talk about on their feeds and get commission when buyers use the link. In 2019, Amazon also began investing in livestream shopping as an extension of its influencer program. Despite some mixed reactions from influencers, Amazon has taken its live shopping feature global, and recently introduced it in India. Walmart also recently unveiled a new creator platform where influencers can host live shopping experiences and then link to products.

Eventually, VIAVIA’s Li thinks TikTok’s move into fulfillment could “definitely” have an impact on behemoths like Walmart, Target and even Amazon. TikTok has unprecedented user engagement, and a unique ability to match users directly with the content they want, no matter how niche it is.

“I’ve watched this sector very closely for quite some years,” Li said, adding that among the top apps in the shopping category are fast fashion retailer Shein and Temu, a new U.S. online shopping site recently launched by Chinese e-commerce giant Pinduoduo — both of which are “going after” Amazon, thanks largely to their ability to play the social media and content game.

“For TikTok and social media giants, they have a unique advantage that the traditional e-commerce players, even Amazon, cannot compare to, which is traffic and screen time,” she continued. But what they’ve been lacking thus far is the local fulfillment capabilities. If they built their own, that could change the whole landscape.

Leave a Reply

Your email address will not be published. Required fields are marked *