TikTok – social commerce of the future?

Social commerce TikTok – social commerce of the future?

Published on 19.05.2020 by Stephan Lamprecht, journalist

The TikTok network is currently disrupting everything that observers have experienced in the field of social networks in recent years. And now its operators are gaining an appetite for digital retail as well.

TikTok has a strong hold over its users. But why this is so, and what exactly the network is, is difficult to explain to those who have not yet dealt with it.

At its core is an app allowing users to record short videos (between 15 and 60 seconds). This concept lets every user star in their own video and was originally released under the name Musical.ly. They can record themselves miming to full-length songs, dancing or pulling funny faces. The videos can then be edited and shared on other platforms. The Chinese parent company of TikTok merged Musical.ly with another platform in 2017 to create the new TikTok.

Vast user base, appealing target group

What makes TikTok so interesting to advertisers and other companies is its enormous growth, vast user base and appealing target group. Two billion people around the world have downloaded the app to date. And the growth of the platform is enormous. The network passed the magic threshold of one billion users within two years, and in doing so, surpassed all other platforms in terms of growth. Facebook needed eight years to do the same; WhatsApp, seven; and the super app WeChat, six years.

TikTok users are appealing to both advertisers and the retail sector. According to information from the company, the network is home to the difficult to reach target group, Generation Z. 69% of users are younger than 25 and around 27% are even between 13 and 17 years old.

TikTok as an advertising platform

ByteDance, the company behind TikTok, understands the appeal of its members to advertisers and now offers a whole range of advertising formats. In Germany, the Otto Group and BVB football club have already experimented with them.

  • In-feed videos and branded lenses work in a similar way to other networks such as Snapchat.
  • The Takeover brand shows full-screen advertising for three to five seconds once the user opens the app.
  • Top-View plays a video spot upon initial contact.

Hashtag challenges are a favourite amongst advertisers.

These call on users to record videos on a special topic or during a particular situation. The videos are then shared under the specified hashtag. They give users the chance to demonstrate their creativity through singing and dancing, and are a way for brands to capitalize on the “good mood mentality” of the platform. And it goes without saying that there are also TikTok influencers with whom companies can collaborate.

Getting started in e-commerce

As with Facebook, Instagram or Pinterest, TikTok is no longer satisfied to be an exclusive platform for advertising. At the end of last year, the first experimental approaches at selling directly from the platform emerged. These allowed selected users and advertising partners to add links to e-commerce websites on their profile page. Work is now underway to make videos “shopable”, i.e. taking users directly from a clip to a promotion in an online shop. This provides brand manufacturers and retailers additional options to monetize their presence on TikTok.

That said, it’s still too early to recommend all retailers to set up a presence on TikTok. But the attractiveness of the target group and the dynamic growth make it worthwhile to follow the development of the network to make sure they don’t jump on board too late.

Stephan Lamprecht, journalist

Stephan Lamprecht has been following e-commerce developments in Germany, Austria and Switzerland for two decades as a journalist and consultant.

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