How is TikTok changing both social media and ecommerce?


Despite having a bleak outlook in 2020, TikTok ended the year on a high note and has embarked on an upward trajectory in 2021 – and the social media platform has evolved into an e-commerce platform for some of the world’s biggest brands. Business Leader looks into what the future holds for TikTok.

According to the research data analysed and published by Comprar Acciones, TikTok was the top-grossing non-game mobile app globally in January 2021.

Users spent $128m on the app, up by 380% from its January 2020 revenue. 82% of the revenue came from China through its domestic app version Douyin and 8% from the US.

Based on a report by Apptopia, there were 89 million installs of the TikTok app in 2020 from the US alone – and hundreds of millions more around the world.

It ranked first ahead of Instagram in the US, which had 62 million. Facebook was third with 53 million and Snapchat got the fourth place with 51 million.

TikTok User Penetration to Rise from 31% in 2020 to 39% by 2024

TikTok was the second most downloaded mobile app in January 2021, with 62 million installs worldwide according to Sensor Tower. China accounted for 17% of the installs via Douyin while the US was second with 10%. For the full year 2020, it was the most downloaded and highest grossing mobile app worldwide. On the App Store, it generated $1.2 billion during the year, marking a 600% year-over-year (YoY) increase.

TikTok had a 500% increase in the number of US advertisers in 2020. Since late 2020, it has signed a number of major brands including Bose, McDonalds, Chobani and Kate Spade. According to eMarketer, TikTok’s user penetration in the US rose from 17.3% in 2019 to 31.1% in 2020. It will increase further to 39.3% by 2024.

On the other hand, in its home market, China, ByteDance (TikTok’s parent company) competes with Tencent-backed Kuaishou. Kuaishou is ranked as the second biggest short-form video platform behind Douyin. It recently raised $5.4 billion in a Hong Kong IPO, the largest IPO raise in over a year. Following the IPO, Kuaishou’s shares went from HK$115 ($14.80) to HK$320.20 ($41), sending its market value from $61bn to $160bn.

TikTok and Shopify launch partnership to help UK businesses thrive and scale

TikTok and Shopify have this week announced a partnership in the UK, helping Shopify merchants create and run ad campaigns directly geared towards the highly engaged, 100 million strong TikTok community in Europe.

The partnership underlines how TikTok and Shopify are helping businesses embrace new ideas, trends and insights. Helping Shopify merchants to stay ahead by authentically engaging with the TikTok community in a simple, scalable way. Since launching its TikTok For Business platform, TikTok has seen brands make real connections with users by embracing the creativity that makes the platform unique.

In the past year, Shopify has seen high growth in the UK market with the number of new store creations on Shopify increasing 116% vs. 2019. Some of the UK’s fastest growing brands use Shopify’s all-in-one commerce platform to sell online, from high-growth companies such as Gymshark, All Birds and Lounge, as well as the next generation of small and medium-sized businesses (SMBs).

Shimona Mehta, Managing Director, Shopify EMEA, added: “The past year has been one of immense change for retailers, who have had to be agile in a rapidly evolving retail landscape. Today, the way that entrepreneurs start, run, and grow businesses has permanently altered, as has how consumers shop.

“Brands are having to compete like never before to get the attention of buyers. The goal is for businesses to make it easier for buyers to discover their brands. With this new TikTok partnership,  Shopify merchants in the UK can connect with new customers in a way that can help them build their brand, drive sales and create engaged communities”.

Through the partnership Shopify merchants of all sizes can access core functions of the TikTok For Business Ads Manager, comprising its easy-to-use tools to create and manage ads on the platform, without leaving the Shopify dashboard.

Lisa Friedrich, Head of SMB at TikTok Europe, commented: “The businesses thriving today are continuing to innovate in order to find the best ways to engage with customers. As the home of joyful creativity, and with a hugely diverse audience, we are very excited about how this new partnership will be able to help brands in that quest. Over the past 12 months, we’ve seen such resilience from founders and entrepreneurs across Europe, including the UK, who have brought energy, creativity and new ideas. They will be at the heart of future economic growth. This partnership will hopefully be a game-changer for Shopify merchants in the UK, helping them quickly, effectively and accurately reach target audiences online, and convert that into spend.”

How has TokTok helped these British brands grow?

Shopify and TikTok have already teamed up with a number of innovative businesses in the UK and more widely in Europe to showcase the power of TikTok and Shopify’s partnership. Business Leader got some of their views on the role of TikTok for businesses.

Taiwo Adegbulu, co-founder and co-CEO, Omolola Jewellery, said: “When our regular stockists were forced to close, Shopify and TikTok became even more critical to the success of our business. Shopify has given us a simple platform to run our online operations since we started Omolola Jewellery, providing helpful data and insights that remove the guesswork from running a business. Advertising on TikTok has complemented this perfectly. As well as being a fun and unique experience, it has opened up a completely new community of jewellery-lovers we can reach with our products. Over 1.8 million people have engaged with our ads since we joined the beta programme – not just in the UK but around the world too, which is really exciting as we look to break into new markets. The TikTok and Shopify integration has made the purchasing journey much smoother for potential customers. This helped us achieve a huge sales increase of 335% compared to December last year and attract hundreds of new customers during the important festive period.”

Dan Marsden, Co-Founder and CEO, Lounge, said: “We’re always looking for new and creative ways to reach and engage with customers, so partnering with TikTok and Shopify on the beta programme seemed like a no-brainer. The user journey from platform to purchase is super seamless. We have been able to serve ads to our core target market on TikTok, then drive them straight to the product page on our Shopify hosted site with fantastic results. 100% of the sales we generated through the new partnership came from new customers too! Our overall business goal is growth and new audience acquisition while nurturing our existing customers. The TikTok and Shopify partnership will definitely help us to achieve that goal.”

Scott Dickson, Founder, Phox Water, said: “Pouring our efforts into driving sales via Shopify and TikTok has turned out to be the best thing we’ve ever done. While our products have always attracted environmentally-conscious customers, TikTok has introduced Phox to a community of people for whom sustainability is a lifestyle. It has made advertising easy and the response has been amazing – there’s definitely an audience for new ideas and eco-friendly innovations on the platform. The integration with Shopify helps us convert this increased interest to sales really easily. On top of this, Shopify maximises the number of new customers we can acquire, keeps costs down and tracks key metrics as we grow. Alongside helping to boost our sales by 42% since joining the beta programme, we’ve expanded our workforce over the last year to meet growing demand.”

Danny Gray, Founder, War Paint For Men, said: “TikTok and Shopify have allowed us to share our brand story in a genuine way and connect with audiences that we hadn’t been able to reach before. This includes Gen Z who we are now successfully engaging with through the platform on their own terms – something that can be tricky for brands to get right! The pandemic impacted our retail potential due to physical shops having to close their doors, and we quickly realised we needed to build out our own direct to consumer channels. Shopify helped us do that at what felt like the click of a button and access new markets at the same time.”

TikTok does eCommerce – but can the supply chain keep up?

As an innovative new entrant into the ever-increasing eCommerce market, Business Leader spoke to from Sian Hopwood, SVP B2B Operations at BluJay Solutions regarding the future of UK supply chains.

She said: “Following the seismic shift in the way we’ve shopped during this crisis, the interest in e-commerce and social commerce may have been accelerated. Now, as Gen-Z social media favourite Tik Tok embraces the trend with ‘shopping channel’-style infomercials, it’s clear that organisations are getting creative with commerce – but can the tech behind it keep up?

“Today, shoppers expect brands to be ‘always on’ and provide real-time product information, such as whether a product is available in a particular store and delivery time frames. But to do this requires two things: visibility into inventory levels and the ability to communicate real-time information to partners, suppliers and customers alike.

“Businesses must be able to replicate this in the real world of transit and logistics. The key will be to streamline and optimise processes throughout the supply chain, from freight to delivery on the last mile. Those which manage to make delivery as seamless as scrolling through a social media feed will come out on top, having successfully met the expectations of this new generation of socially-minded shoppers.

“This investment is set to pay off: BluJay research shows that 61% of supply chain professionals see an enhanced customer experience as the main driver for supply chain innovation. Getting to grips with this new customer behaviour, and making improvements to the supply chain, is key to remaining competitive in a rapidly changing world.”

Has TiKTok created a shift in how social media platforms will be used in the future?

Business Leader got the views of Tim Hyde, social media guru and CEO of TWH Media on how TikTok has changed businesses social media strategies for 2021.

The rise in the popularity of newer social media channels, such as Tik Tok, has definitely pioneered a new approach to social engagement. Tik Tok has encouraged old and established brands to communicate in a completely different way. The example I am going to cite is that of Walgreens, the second-largest pharmacy store chain in the US.

Such massive corporations adhere to strict brand guidelines, scrutinised by multiple channels before approval. Walgreens, so corporate and traditional in its marketing and advertising, stepped right out of these tight perimeters in 2020 and started using Tik Tok. Tik Tok advertising has a native style and in using this platform for advertising, brands such as Walgreens are completely disregarding the traditional guidelines and actually creating native content.

From an organic and marketing perspective, this is a massive transition and so far removed from typical FMCG brand communication. They have used employees in amusing beauty videos, rapping, gimmicky product demos etc. This is not just happening at individual store level but on the main brand account, even using a strapline on their Tik Tok account which reads: Trusted since 1901. Making TikToks since 2020.

This activity will no doubt make other FMCG brands stop and stare and if they want to keep up, they might need to adapt to the best practice of a social media platform.