The Marketplace Boom   //   October 3, 2023

‘Not mind blowing’: Brands that have started testing out TikTok Shop say it’s a slow burn

Some brands that have started selling via TikTok Shop in the U.S. say they’ve seen only a moderate increase in sales thus far.

Paul Jauregui, co-founder of BK Beauty, said he has seen net new sales of about 10% to 20% coming from transactions on TikTok Shop, on average, since he and his wife first started selling contour brushes on the platform seven weeks ago. Katya Constantine, founder of Digishopgirl Media, said one of her New York-based food clients that has been testing Shops for over six months has seen an incremental rise in sales of up to 15%. Put together, the impact so far has not been mind blowing — but brands remain excited to use TikTok for shopping.

On September 12, TikTok announced the rollout of Shop, which the company officially began testing in the U.S. in November 2022. TikTok Shop is a new marketplace where users can buy products directly within the app. Brands can sign up to be a part of TikTok Shop, and get access to the platform’s in-app checkout. Meanwhile, creators can sign up to be a part of TikTok Shop’s affiliate program, and recommend products from brands that are a part of TikTok Shop to their followers in exchange for a commission on sales. The feature was previously only available in the U.K. and seven countries in Southeast Asia.

According to The Information, TikTok is hoping that sales through TikTok Shop will exceed $10 million per day in the U.S. by the end of the year. Right now, shoppers in the U.S. spend close to $4 million a day on TikTok Shops, the report noted.

Constantine said the TikTok Shop numbers are “incremental but it’s not mind blowing.” She said it reminded her of when Facebook rolled out Shops in 2020 and brands also didn’t see any significant sales bumps right out the gate.

BK Beauty’s Jauregui, who has been selling via TikTok Shop for the last seven weeks, described the initial experience of setting up his TikTok storefront as “very buggy” from an operations standpoint. “It was painful getting not only our products synced with TikTok Shop, but managing the orders and customer management was [hard],” he added.

Jauregui said the brand has found a bigger jump in sales when using TikTok’s affiliate program where a seller can tap TikTok creators to share and link its products in short videos and livestream in exchange for a commission paid to them. BK Beauty offers 15% of commission for these sales. And Jauregui added that BK Beauty can increase that commission at a per SKU level as well.

Last week, BK Beauty saw a jump of 30% in sales from TikTok Shop, thanks to one of these creator videos by makeup artist Melissa Murdick, but Jauregui said that was “a one-off day.”

In order to get more brands signed up for TikTok Shop, the platform has worked to easily integrate its shopping experience with as many vendors within the e-commerce space as possible. Shopify merchants, for example, can manage their TikTok Shop directly from Shopify though the TikTok for Shopify App.

TikTok has also added fulfillment partners like Flowspace and Shipbob. Flowspace CRO Anne Hallock said with TikTok Shop, brands have an opportunity to connect more meaningfully with their shoppers on TikTok because it’s more engaging. “TikTok Shop is a dynamic medium where you are in dialogue with your customer. There’s a level of transparency when you are connecting with consumers on TikTok that is again more dynamic than perhaps any other platform,” added Hallock.

But niggling issues still remain. Last week, for example, it turned out that there was about 200 TikTok Shop orders that didn’t sync with BK Beauty’s Shopify storefront. “We didn’t have the built-in inflows to discover the issue. We saw some issues pop up on the TikTok side of the fence, showing that there were orders that had not been shipped in time. We had to figure out some workarounds to get those orders in. And so there was a lot of manual intervention required to process those orders,” said Jauregui.

Still, Jauregui said there’s definitely also some “gold in the hills” on TikTok Shops as it starts to incentivize creators on the platform through its affiliate program.

“I’ve been really impressed with the granular controls that TikTok has built into their affiliate feature and the amount of information and data that they’re sharing with both the content creator as well as the brand,” Jauregui said. He said the incentives and visibility offered by the affiliate program could encourage merchants to “double down and do more with TikTok Shops.”

While TikTok continues to have some pain points for sellers on the integration side, ultimately, Jauregui said, there’s merit in TikTok trying to do more than just build another efficient ad platform.

“We’re starting to see the magic of what bringing all those pieces together under one roof really opens the door for not only for brands but also content creators,” said Jauregui.