U.S. lawmakers are scrutinizing TikTok again as it becomes more important than ever for ecommerce retailers.
The U.S. is mulling a ban of the short-form video app because of alleged national security risks. Concerned regulators worry TikTok’s parent company, ByteDance, shares private user data with the Chinese government. A TikTok ban has been proposed before. In 2020, the Trump administration publicly mulled banning the Chinese app and banned it on many government devices.
TikTok transformed into an ecommerce powerhouse
Since 2020, TikTok has become more popular among U.S. users. The app reached 150 million monthly active users in March 2023, up from 100 million in 2020. In that period, TikTok became a shopping platform for many users, prompting retailers to spend big on advertisements. TikTok was charging up to $2 million per day for ads taking over its homepage in 2021, Bloomberg reported. In 2022, TikTok rolled out a shopping feature in the U.S. and debuted plans for U.S. fulfillment centers, signaling plans to further cement its role in ecommerce.
A TikTok presence is particularly important for retailers looking for young consumers. In 2022, 83% of U.S. teens used TikTok at least monthly. 16- to 25-year-olds spend three times as much time on TikTok as on the next most popular social media website, according to September 2022 data from Measure Protocol.
TikTok is ThredUp’s smallest social platform
Secondhand apparel marketplace ThredUp has an active TikTok account of nearly 31,000 followers. It regularly posts memes, videos describing the harms of fast fashion, and collaborations with influencers like Nava Rose, who has nearly 6 million followers. Over Valentine’s Day, ThredUp used Rose’s videos to direct viewers to the “Dump fast fashion” shop of items Rose curated. ThredUp uses AI to surface similar items to the ones Rose selected.
For Noelle Sandler, chief marketing officer at ThredUp, TikTok is just one avenue to reach customers.
“We have a nice collection of platforms and content that we’re sharing across,” including Instagram Reels and YouTube, she told Digital Commerce 360. Though ThredUp’s TikTok audience is engaged, she said, it’s the smallest of the retailer’s social networks. A TikTok ban would be a blow, but not a huge one.
“I’m hopeful that TikTok gets to stay,” she said.
But if it doesn’t, she said, she believes influencer content will continue to perform well on other platforms.
Shein benefitted from organic TikTok videos
Fast fashion retailer Shein is one of the brands most closely associated with TikTok, but global head of strategy and corporate affairs Peter Pernot-Day brushed off concerns about a possible ban.
Shein ranks No. 12 in Digital Commerce 360’s database of the top online retailers in Asia.
With the help of TikTok and the thousands of user-generated “Shein haul” videos, the brand became the most-visited apparel retailer website in the world, according to SimilarWeb. Though TikTok deserves at least partial credit for making Shein a household name in the U.S., the company doesn’t view TikTok as more essential than any other advertising method.
“It wasn’t so much influencer strategy as it was organic,” he said, as users who weren’t paid influencers posted their Shein purchases online in hopes of gaining followings.
“We‘re a consumer of advertising platforms. We’re active on Snap, Meta, Google ads,” TikTok is just one more place to buy ads, Pernot-Day said. He compared it to Shein’s new billboards in the Paris subway, as another way to reach customers where they are. If TikTok is banned, though, Shein might lose some of that organic awareness cultivated online.
A TikTok ban would be disappointing for Pacsun
Clothing brand PacSun is active on TikTok, with 2 million followers. The retailer prides itself on being on the cutting edge of ecommerce technology, from working with virtual influencer Miquela to creating a shoppable Metaverse store in Roblox. PacSun was also one of a handful of retailers to test out in-app checkout in TikTok in the U.S., co-CEO Michael Relich said.
PacSun ranks No. 252 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.
Like Shein, PacSun initially saw TikTok as a venue for organic content made by users who just wanted to show off their purchases. By 2020, PacSun was promoting user-generated content with hashtag challenges.
“Wherever the customer is, we want to be there,” Relich said, stressing the importance of remaining relevant with Gen Z and Gen Alpha customers. For PacSun, that includes TikTok, and he would be “disappointed” in a ban.
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