The ecommerce platform provider will enable merchants to create and deploy shoppable, in-feed TikTok video ads from their Shopify dashboards.

Shopify is helping its merchants tap into the latest social media craze: the Chinese short-form video-sharing social network TikTok. The new TikTok Shopify channel, available in the Shopify app store, enables merchants to create a TikTok For Business account and deploy in-feed shoppable video ads on TikTok from within Shopify, the ecommerce platform provider announced in a blog post on Tuesday.

Shopify Channels is the set of sales and marketing integrations that help merchants connect with their customers on social media and across the web. including on Facebook, Instagram, Snapchat, TikTok and Google, and major marketplaces, like Amazon and Walmart. Amazon.com Inc. is No. 1 in the 2020 Digital Commerce 360 Top 1000. Walmart Inc. is No. 3.

To use the new tool, merchants select the products they want to feature. The tool then automatically generates video ads that drive TikTok users to a merchant’s Shopify store for checkout. The new functionality offers pre-designed templates for ads that enable merchants to use imagery or video they already have on hand, Shopify says. Merchants will also be able to track ad performance in their Shopify dashboards.

Shopify and TikTok—which has more than 100 million active users in the United States alone—will also collaborate to test new commerce features over the coming months to help merchants expand their paid and organic reach on the social network, Shopify writes.

The move follows other recent integrations Shopify has launched with various social networks. In May, Shopify integrated with photo-based social media company Pinterest to turn merchants’ product catalogs into shoppable “product pins,” or pins that allow retailers to update price, availability and product descriptions in their Pinterest accounts. The feature allows Shopify retailers to upload their product catalogs and publish in-stock products from the Pinterest app, which is integrated with Shopify. Retailers can add tags to their Pinterest accounts, which help consumers who search for a product or category to discover those brands. Additionally, a “shop” tab appears on the retailer’s Pinterest profile, and Shopify retailers can promote their pins as paid ads. Merchants can also edit their Pinterest listings through their Shopify dashboards.

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“Following other recent platform integrations with Facebook, Instagram, Pinterest and YouTube, Shopify is more aggressively connecting merchants to large scale consumer online platforms, capitalizing on the rapid expansion of shopping [and] ecommerce ad formats, significantly broadening reach, and we believe, setting the stage for incremental growth in GMV,” Baird analysts write in a research note on the deal. “For the advertising platforms, Shopify integration can quickly ramp the number of merchants contributing product listings and purchasing shopping ads.”

Shopify’s broad network of platform integrations will help it capitalize on the rise of shoppable ads as these types of ads gain a larger share of total digital ad budgets, Baird says.

45% of retailers spend more than 10% of their digital marketing budgets on social media, according to a Digital Commerce 360 survey of 105 retailers conducted in June. 61% of retailers say social media marketing is effective and 50% say it is effective specifically for acquiring new customers. Additionally, 60% of retailers say they use social media to increase brand awareness and 51% use it to drive sales.

But TikTok still isn’t currently widely used by retailers for marketing. 5% of merchants say they use TikTok, compared with 82% that use Facebook. However, this could change as 60% of merchants say they plan to increase social media marketing spending in 2021.

“As social media becomes more shoppable by the day, it makes sense that all kinds of technology giants would want a piece of the pie,” says Suzin Wold, senior vice president of marketing at ratings and reviews company Bazaarvoice. “After years of companies very slowly realizing the potential power that social media has in the consumer’s purchasing process, this move sends a message that these avenues are the next frontier in ecommerce.”

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According to the Bazaarvoice annual Shopper Experience Index, released in April, 42% of shoppers say they have made a purchase on social media. “This number has surely risen during the pandemic, as consumers have turned to their phones more than ever while largely stuck at home,” Wold says.

The report uses data from over 6,200 brand and retailer websites in the Bazaarvoice Network, a global survey of more than 5,500 consumers and data from product discovery and reviews platform Influenster’s community of more than six million consumers.

And as the holidays approach, consumers plan to rely on social commerce more than ever before. 19% of consumers are planning to holiday shop through social media and have items shipped to their homes, compared to 14% last year, according to another Bazaarvoice survey of more than 5,000 consumers in the United States, Canada, Mexico, the United Kingdom, France, Germany and Australia about their holiday shopping plans.

Shopify’s Q3 earnings defy market expectations 

Shopify also reported Q3 earnings on Thursday. The ecommerce platform provider defied market expectations once again in the third quarter, posting stronger-than-expected results as the global pandemic continued to push shoppers out of bricks-and-mortar stores and onto online platforms. Revenue at Canada’s largest company by stock market value nearly doubled to $767.4 million.

Gross merchandise volume—a measure of product sales flowing through its platform—was $30.9 billion, an increase of 109% over the third quarter of last year, reflecting strong e-commerce spending by consumers.

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The company continued to gain traction in new services it offers to customers. Shopify said 51% of eligible merchants in the U.S. and Canada used Shopify Shipping in the third quarter of 2020, versus 45% in the third quarter of 2019.

Its lending business is growing as well. Merchants in the U.S., Canada and the U.K. received $252.1 million in merchant cash advances and loans from Shopify Capital in the quarter, an increase of 79% from the amount received by U.S. merchants in the same quarter last year.

The company expects its model to remain popular with buyers and sellers in the pandemic but cited macro risks in its decision not to provide fourth quarter or full-year guidance.

“These include unemployment, fiscal stimulus, and the magnitude and duration of the COVID-19 pandemic, all of which may impact new shop creation on our platform and consumer spending,” Shopify says.

Founded in 2004, the Ottawa-based firm’s core business is helping retailers get online quickly and cheaply. But it has expanded to offer an ever-widening suite of services, including lending, payments and shipping solutions. With a market capitalization of almost $125 billion, the company is now Canada’s largest publicly traded company.

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Bloomberg contributed to this story.

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