Member Exclusive   //   January 23, 2025

Marketplace Briefing: Even with TikTok ban delayed, agencies are preparing for uncertainty

This is the latest installment of the Marketplace Briefing, a weekly Modern Retail+ column about the ever-changing e-commerce marketplace landscape. More from the series →

Ghost Agency, an agency partner to TikTok’s e-commerce business, Shop, began preparing for the possibility of a TikTok ban in the U.S. months ago.

In the lead-up to Jan. 19 — when TikTok’s Chinese parent ByteDance was required to sell its stake in the app or face a nationwide ban — Ghost Agency laid off 80% of its staff to keep business afloat. Ghost Agency, which works with brands like Wyze and Alo Yoga, also tried shifting clients over to alternative platforms like Instagram Live and Amazon Live.

But it wasn’t enough. Even though President Donald Trump signed an executive order on Monday giving TikTok 75 more days to operate in the U.S., Ghost Agency is shutting down, its co-founder Nicole Rechtszaid told Modern Retail. Moving forward, Rechtszaid said she’ll be running the business on a freelance basis only. She has also stopped onboarding new TikTok clients altogether until the app’s future in the U.S. is less murky.

“We’re a small, self-funded company,” Rechtszaid said. “Any interruption of services can really harm us. We had some incredible clients lined up, but many of them decided to pull back on TikTok until there’s more clarity.”

Rechtszaid’s experience is a magnified example of the do-or-die mentality other agencies are feeling. 

Since TikTok launched Shop in the U.S. in September 2023, many agency partners have generated hundreds of thousands, even millions, of dollars in sales for brands on the platform. But that could all go away if TikTok is permanently shut down in the U.S. or if the app changes hands and becomes a shadow of what it once was. Unlike marketing agencies that have added TikTok as a service to brands and creators, TikTok Shop agency partners oftentimes specialize primarily in TikTok. Now, they’re plotting their next steps as TikTok’s future remains cloudy.

“It’s not just that we’re running ads and wondering if we should shut them off,” Rechtszaid said. “There’s a lot more at stake when there’s commerce involved. Our clients were potentially looking at losing access to selling portals, which meant that if they sold tens of thousands of dollars worth of products, they might not have been able to ship them.” 

Despite the 75-day reprieve, Rechtszaid is approaching TikTok with caution. “I’m telling clients they’re welcome to continue posting content for now but to do it with an air of caution,” she said. 

For Rechtszaid, the most significant concern is not just the ban itself, but the structural changes that could occur within TikTok’s operations if ownership changes hands. 

Several potential buyers have expressed interest in acquiring the app. For instance, President Donald Trump has said he supports X owner Elon Musk or Oracle founder Larry Ellison buying TikTok, suggesting a joint venture in which the U.S. might own half of the app.

“There’s a chance that the TikTok Shop could disappear overnight, or it could change dramatically,” she said. “The algorithm could shift, and everything could change.”

Like Ghost Agency’s Rechtszaid, David Grant, co-founder and CEO of TikTok Shop agency partner Favored.Live, said the company has been in “diversification mode” for over a year. Although much of the agency’s activity is still centered around TikTok, Grant said it has been exploring alternatives, including Amazon, YouTube and Instagram, to reduce its dependence on the app.

Grant acknowledged that Favored.Live would likely suffer a financial hit if TikTok were to be permanently banned, especially in the division that focuses on TikTok commerce. However, he also said the company has enough financial stability to weather the impact of a ban.

“We’re a profitable company. We’ve got good cash reserves. We’re not in a panic or anything,” he said. Still, the potential loss of TikTok would be “a material hit,” he said.

Another TikTok Shop agency partner executive, Mindy Yang, the co-founder of TikSage, said she’s optimistic that if a ban goes through, a TikTok copycat will crop up in its place. Still, she said she’s doubtful an alternative app or platform will emerge that can fully replicate the success of TikTok. “I don’t think TikTok is really replaceable,” she said. 

In the meantime, TikSage is operating business as usual for the most part. For instance, this week, it has been meeting clients to resume 2025 strategies and plans. 

In addition to providing TikTok services for brands, TikSage also runs an advertising business that helps brands market themselves to Chinese consumers on platforms such as Douyin–TikTok’s Chinese counterpart–Baidu and RedNote. If a ban goes through, Yang expects that business will help keep operations afloat. Yet, even as users, including brands, are turning to platforms like RedNote, she said RedNote can’t fully replace TikTok.

“If you want to sell to Chinese consumers, that is a platform you should go to,” she said. “But if you want to use a platform to sell to U.S. customers, it’s not really ready yet.”

As other agencies, brands and creators scramble to test out other platforms like Amazon Live, Instagram Reels and Flip, Yang said she isn’t in a rush to diversify just yet. Instead, she plans to wait and see where creators flock to next and follow them accordingly. 

“Other agencies aren’t specialized in TikTok. So, it’s a bigger challenge for us to pivot our business,” they said. “In the past year, we invested a lot of resources and money into our own team and infrastructure purely in the TikTok ecosystem.”

All told, TikTok is not just a marketing channel but a crucial element of their business model, and its potential loss could have serious implications for their livelihoods. 

“TikTok provided an opportunity that was so distinct from other platforms that simply transferring over to another existing platform is a very big challenge,” Ghost Agency’s Rechtszaid said. “It’s much easier said than done.”

Marketplace news to know

  • As TikTok went dark last week, Pinterest shared a pitch deck with advertisers trying to woo them over to the platform.
  • The U.K. retailer WHSmith is the latest player to enter the retail media space.
  • EBay has acquired the end-to-end online automotive transaction solution provider Caramel.

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