3 key insights to maximise your TikTok Shop business
Watching a video of a woman mistaking a cashew nut for an AirPod on TikTok, it is easy to forget that this short video social media platform is disrupting ecommerce as well as entertainment. Now, with TikTok Shop poised to expand into Mexico, France, Germany, Italy and Spain, what unique opportunities might the app offer sellers?
The digital landscape continues to evolve. This year’s Global Digital Report revealed that there are now more than 5 billion active social media users globally, and that just under three-quarters of all internet users engage in ecommerce activity each month. Drill into the detail, and trends emerge that fast-growing companies can use to optimise ‘social commerce’ strategies.
There are more than 5 billion active social media users globally
1. Time in market
The facts
When it comes to global ad audiences, both Meta, owner of Instagram, and ByteDance, owner of TikTok, report that they attract around 1.56 billion views each month.
They have a similar size audience yet a difference emerges when comparing the time users spend on the apps. Based on figures from July – September in 2023 the typical Android TikTok user spent 34 hours a month scrolling through content, far longer than time spent on Instagram, at 15 hours and 50 minutes.
The opportunity
TikTok Shop is active in Indonesia, Malaysia, Thailand, the Philippines, Singapore, Vietnam, the United Kingdom and the United States. Understanding what sales content is most likely to engage viewers is essential.
The good news is that although TikTok Shop is a relatively new channel for sellers, the rules of engagement remain unchanged. The videos that prove consistently effective begin with a ‘hook’ to gain viewer interest, followed by the ‘body’ which sells the product benefit, and conclude with a clear call to action plus a reliable payment gateway to ensure a smooth checkout experience.
For sellers not confident about producing video content, the TikTok Creative Exchange offers access to creative partners who specialise in scripting, talent, and production.
2. Understanding ‘Community Commerce’
The facts
As a space where people want to be entertained and participate, it is not surprising that #TikTokMadeMeBuyIt has grown to become an ecommerce phenomenon.
The hashtag features videos and reactions from a mix of influencers and organic users, often celebrating products that improve their daily lives. ByteDance reports that the hashtag has generated 75 billion views globally.
The opportunity
A blend of sponsored and organic content can make products that solve ‘problems’ (that people may not even realise they had) explode in popularity on TikTok. Items from an electric coffee mug warmer to a magnetic clip-on LED light to improve selfies have boomed thanks to #TikTokMadeMeBuyIt.
As well as gadget sellers, established brands now incorporate the hashtag as part of an omnichannel sales strategy. One example is L’Oréal which delivered a box of its leading products labelled #TikTokMadeMeBuyIt to 200 TikTok creators. The campaign focused on Pakistan and, supported by ad spend, L’Oréal reported that the online event achieved its highest sell-out yet.
TikTok is also encouraging users to take part in live streams, hosting its first $1 million livestream in June for one of its sellers. TikTok live shopping is an experience that offers brands an opportunity to showcase their products in real-time through livestream events, resulting in bumper sales over a very short timeframe.
Of course, success can test companies. To meet the challenge of rapidly scaling up to meet demand, sellers need access to fast payments. Getting paid immediately for marketplace sales proves critical for restocking.
3. Really get to know your audience
The facts
It is well known that Gen Z (those born from the late 1990s to early 2000s) are big TikTok users and the app’s influence is now growing far beyond entertainment.
Research from Adobe has even found that in the US, 64% of Gen Z, as well as 49% of millennials (those born between 1981-1996), now use TikTok as a search engine, browsing everything from recipes to DIY inspiration.
The Retail Technology Show also revealed that in the UK, the average TikTok user makes 10 purchases on the app each year with the figure even higher for Gen Z, at an average of 19 purchases. TikTok is a place to attract the attention of younger active buyers.
The opportunity
Clothing at the UK retailer Marks & Spencer (M&S) had an ageing customer demographic, and its sales were in decline. Over the last three years, M&S’s use of social media has helped to revitalise the brand.
With designs overhauled, the retailer focused on social media content including influencers sharing how they wear M&S clothing and accessories, and it utilised formats familiar to a younger audience such as TikTok’s GRWM (Get Ready With Me).
Reaching a younger audience is not the only opportunity for sellers. Other brands have discovered more about buyers and their behaviour. Portuguese brand Salsa Jeans, for example, uses TikTok campaigns as part of its marketing mix. Featuring video shopping ads for a campaign aimed at Spanish buyers, it learned that two thirds of its total conversions came from the 34 – 54 age group. It is a demographic Salsa Jeans did not expect to buy via TikTok, and the insight will inform its next campaign as it looks to improve on an impressive 4.3 ROAS (return on ad spend).
Gear up for growth
For fast-growing companies, there will always be a pressure to respond quickly to shifts in the digital landscape. Changes can happen at a breakneck speed and we understand how to partner with clients as they unlock their true potential. Immediate payment on marketplace sales from Storfund prove pivotal as shorter cash cycles mean more sales.
There is no limit to how much cash you can receive, so if your company is ready to explore and expand its social commence operation, Storfund will keep pace with your growth every step of the way. Get in touch to find out more.
