February 6, 2024
TikTok is testing a feature designed to make all posts shoppable as it goes all-in on creating what the company hopes will be a multi-billion-dollar U.S. e-commerce business. The new technology uses machine learning to identify objects in a video then prompts viewers to “find similar items on TikTok Shop” using links and in-app search. The ByteDance-owned social platform is also reportedly planning to launch multiple live-streaming studios in cities including Los Angeles where creators can go to stream shopping-themed content. The facilities are expected to be able to host multiple studios servicing dozens of creators per day.
“TikTok apparently wants to open a significant number of these studios, with Los Angeles serving as a central hub the same way Shenzhen is big for e-commerce in China,” where social shopping generates “billions of dollars per day,” writes Tubefilter, noting “this is all part of TikTok’s U.S.-focused e-commerce push, which is expected to cost the platform at least $500 million this year,” including for the online venture TikTok Shop, which has “nearly quadrupled its own commission on sales.”
Shopping is “a top priority for TikTok, which aims to sell $17.5 billion worth of goods in the U.S. this year,” according to Bloomberg, which says the stateside version of TikTok Shop — launched last year in “an effort to combine the ease of shopping on Amazon.com with the product discovery afforded by social-media sites like Instagram” — has met with “mixed reviews.”
“Users have complained about counterfeit and knockoff products sold on TikTok’s marketplace,” Bloomberg says, noting that “some also say the preponderance of ad-like posts from influencers is wrecking the experience.” But that hasn’t stopped TikTok from soldiering on.
“When TikTok creators start a livestream to chat about their new favorite hairbrush, dog toy or cleaning product, they’re usually doing so from a setup in their own home. Soon they may be doing it from a company operated studio,” reports The Information.
“TikTok apparently hasn’t settled on how the studios will work financially,” writes Tubefilter, pondering “whether they would charge creators a membership to access the studio and its production resources” and may “work directly with some brands or ad agencies to help subsidize some production costs for creators, or help arrange for manufacturers to send samples directly to the studio for creators’ use.”
As for the TikTok Shop links, “TikTok previously confirmed that it was testing the feature with a small number of users in the U.S. and UK,” according to The Verge, which says “one user who had a product link added to their video was not told that it would be used to promote TikTok Shop.”