Wearing a sparkly dress and a Santa hat over her bright pink hair, Sarah Potempa stood in front of her smartphone in the warehouse of a hair care company in Waukegan, Illinois. It was time to go to work.
Potempa is a celebrity hairstylist who goes live on TikTok multiple times a week. During what she calls her “packing show,” Potempa will livestream how she packs the Beachwaver curling irons she orders for six to eight hours at a time.
The Nov. 20 stream had a party-like atmosphere, with Potempa taking a break between shipping orders to dance to 50 Cent’s “In Da Club.” For the more than 1,000 TikTok users who regularly watch Potempa’s shows, it’s a combination of entertainment and shopping all at once.
Beachwaver is part of a growing number of retailers flooding into the video app’s shopping service, TikTok Shop. TikTok Shop launched in September 2023 as a way for users to buy products without leaving the app, and since then, the Chinese-owned app has become a viable option for retailers looking to diversify their e-commerce business from Amazon. has emerged as a possible alternative.
Via a dedicated (Shop) tab, retailers big and small are promoting all kinds of products, from eyeshadow palettes, cell phone chargers, detox teas, treadmills, and more. On TikTok, retailers typically offer generous coupons and free delivery within a few days. Shoppable posts look like regular videos, but they are advertisements for products for sale in the TikTok Shop, and they often appear on TikTok’s main video feed, known as the “For You” page. These posts allow users to purchase products without leaving the For You feed.
At Potempa’s show, shoppers compete to win 50% off BeachWaver products, free extras like face wash and lipstick, and Potempa reads out their usernames while packing their orders. You will also get a chance to do it. on the screen.
“When TikTok Shop was new and people weren’t using it yet, people often asked me, ‘Is this still on Amazon?'” Potempa said in an interview. “We often get questions like, ‘Can I buy it elsewhere?’ Now, almost a year after launch, we have achieved 1.2 million orders.”
TikTok, owned by ByteDance, has already established itself as an advertising powerhouse, and with TikTok Shop, the company is opening up new revenue streams through e-commerce. The company has attracted the likes of Nike, PacSun, and Crocs. These retailers hope to tap into the more than 170 million Americans on TikTok who make impulsive purchases while scrolling through videos.
They’re not alone.
Amazon sellers are also being persuaded to try the service with promises of low fees and deep discounts on products offered by TikTok. In addition to sellers, the company hires talent from Amazon to fill key roles at TikTok Shop in areas such as marketing, creator relations, brand safety, category managers, and operations.
In the 15 months since its launch, TikTok Shop has emerged as a “massive e-commerce machine,” according to market research firm ecommerceDB. EcommerceDB predicts that TikTok Shop’s total circulation, or dollar value of items sold on the marketplace, will more than double to $50 billion this year. This is a fraction of the $757 billion in gross merchandise value that Amazon expects in 2024, but the TikTok Shop is still making progress.
“Every time you scroll, every other scroll is a shop post, so we invest heavily in driving in-app conversions,” said Kyla Schwartz, director of consumer insights and retail and consumer goods strategy at Salesforce. “We are doing this,” he said.
Amazon spokeswoman Mila Dix told CNBC in a statement that sellers are engaging with the company’s stores “more than ever” and are seeing great success. Dix said the company’s services for sellers are optional, such as fulfillment, and cost “on average 70% less” than comparable two-day shipping.
“Our retail partners are extremely important to Amazon, and we work hard to innovate on their behalf and support the growth and success of these businesses across all sales channels,” Dix said. said.
Beachwaver CEO Sarah Potempa hosts multiple livestreams a week on her TikTok Shop.
approaching deadline
TikTok’s e-commerce efforts come at a precarious time for the company.
President Joe Biden signed legislation in April requiring ByteDance to sell TikTok by January 19th. If TikTok does not sever ties with its parent company, app stores and internet hosting services will be prohibited from offering the app, amounting to a nationwide ban. In the US, TikTok filed a lawsuit to block this measure.
President-elect Donald Trump could save TikTok from a possible ban by the United States. After trying to ban TikTok during his first administration, Trump reversed his stance, saying in an interview on CNBC’s “Squawk Box” in March that the app had “a lot of good and a lot of bad.” “Yes,” he admitted. Mr. Trump changed his position around the time he met with billionaire Jeff Yas, a major investor in ByteDance.
As the January deadline approaches, TikTok is operating mostly business as usual.
TikTok Shop executives touted the company’s marketplace as a holiday shopping destination at an October event in Manhattan with executives and social media influencers. Nico Le Bourgeois, head of U.S. operations at TikTok Shop, said users have purchased hundreds of millions of units on the company’s e-commerce platform since its launch in September 2023. Le Bourgeois, who joined TikTok in August 2023, previously spent nearly nine years at Amazon in various departments, including third-party marketplaces.
Le Bourgeois told CNBC in October that TikTok Shop isn’t trying to sell “everything to everyone.” TikTok Shop is a product discovery marketplace that showcases “new, cool, and interesting” items from brands big and small, he added.
“See it, like it, buy it. It’s not a hunt,” he said. “It’s a completely different way of shopping.”
Le Bourgeois declined to comment on the impending TikTok ban, but a company spokesperson at the event said TikTok Shop is going strong.
“Both the sellers and the creators here, they make a living from TikTok,” the spokesperson said. “We’re going to continue to show up for it. It’s a huge opportunity for us.”
“Let’s enjoy it while it’s hot.”
More Americans are expected to turn to TikTok and other China-related apps to buy gifts this holiday shopping season.
According to Salesforce, about 63% of Western consumers plan to buy from Chinese shopping apps during the season. This includes TikTok, Alibaba’s AliExpress, Shein, Temu and fast fashion company Cider.
TikTok announced Saturday that U.S. Black Friday sales exceeded $100 million, with the most popular categories including home goods, fashion and beauty products. Canvas Beauty, a top seller of hair care and beauty products on TikTok Shop, reached $1 million in sales within two hours of the app’s launch, the company said.
Some retailers and sellers, who say TikTok accounts for the majority of their online sales, told CNBC they plan to continue using the platform despite its potential demise.
As a brand that relies heavily on the TikTok platform, we can’t ignore the debate surrounding a potential ban on TikTok in the US, but Rachel Chen, co-founder and COO of Yay’s Snacks, said: He said he is not confident that TikTok will be phased out under the Trump administration. That appears to be the president-elect’s main focus.
Yay’s Snacks, which makes crispy Cambodian beef jerky, was one of the earliest companies to join TikTok Shop when it launched. Yay’s founder and CEO, former YouTuber Marlin Chan, frequently posts humorous TikTok videos promoting snacks based on his grandmother’s original recipes. Among the videos is a series that parodies the show “Undercover Boss”. Thanks to these videos, Yai has gained tens of thousands of TikTok followers who continue to buy the jerky, Chen said.
At one point, TikTok sales accounted for nearly 90% of Yay’s total revenue, with monthly revenue from the app reaching $75,000 at its peak last November, Chen said. If TikTok is banned, Yay’s is willing to turn to Amazon and its own website, but Chen said that as long as TikTok is “still here, we’re going to do everything we can to stay on top.” he said.
“If we were sitting here worrying about what’s next, we would never have joined the TikTok shop,” Chen said. “I’m going to have fun in the heat.”
Competition with Amazon
Scrub Daddy, known for his smiley face-shaped sponge, has gone viral on TikTok during the coronavirus pandemic, with more than 4 million followers. The top video, the Damp Duster sponge demonstration, has been viewed 30 million times, and the best-selling product on TikTok Shop has been purchased nearly 76,000 times, according to the app. This figure does not include items returned after purchase.
After getting its start in 2012 with an appearance on “Shark Tank,” Scrubs Daddy CEO Aaron Kraus said he lost faith in traditional marketing efforts.
“We’ve done some TV advertising, we’ve done some outdoor billboard advertising, we’ve done a little bit of radio,” Kraus said. “All I noticed was that I was throwing money up in the air.”
The company pivoted to social media marketing, primarily Instagram, which turned out to be a “golden nugget,” Kraus said. Scrub Daddy opened an account on TikTok in 2020 and collaborated with influencers such as Vanessa Amaro, a popular account for house cleaning content with more than 5.7 million followers, to promote its products. Kraus said that after Amaro recommended sponges to viewers, Scrub Daddy sold 30,000 units in one weekend.
TikTok’s “algorithm allows one hysterical, crazy video to rack up millions of views,” he says.
In recent months, TikTok has encouraged retailers and merchants to host multi-hour livestreams multiple times a week as a way to connect with shoppers. Many brands are investing in building their own studios to record their shows or hiring people to host them.
Scrubs Daddy poached longtime QVC host Dan Hughes after he was fired from the home shopping company in 2023. Some companies, like BeachWaver, have turned their CEOs into on-screen personalities.
TikTok Shop was a hot topic at the Amazon seller conference in New York in October. A packed house of sellers packed the session on “How to Grow Your Brand with TikTok Shop” to hear about the potential for brands to generate $8 million to $10 million in sales from TikTok in less than an hour. We listened to commerce strategist Rafay MH talk. year.
“Amazon has a lot of competitors,” MH said. “TikTok is an opportunity to get attention and make sales for free.”
Many Amazon sellers were initially slow to join the platform, but have since embraced TikTok, said Michelle Burnham Smith, who provides consulting services to online businesses.
“I was a gold miner standing on a street corner in New York, dragging my feet, saying, ‘There’s gold in those hills.’ And people were like, ‘Oh, sure.’ ” Burnham Smith said. When they were there, or their guys were there, they were like, ‘We’ve got to get on there.’ ”
Burnham-Smith said there is currently “extreme FOMO”, or fear of missing out, among Amazon sellers to join TikTok, even though TikTok will no longer exist in the U.S. next year. It is said that there is.
“Whatever the future holds for TikTok Shop, they’re willing to take that money now and take advantage of it while it’s still profitable,” Burnham-Smith said.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
