Sporting a sparkly dress and a Santa hat atop her distinctly pink hair, Sarah Potempa stood in front of her smartphone at her hair-care company\u2019s warehouse in Waukegan, Illinois. It was time to go to work.\u00a0<\/p>\n
Potempa is a celebrity hairstylist who goes live on TikTok multiple times a week. During \u201cthe packing show,\u201d as she calls it, Potempa livestreams herself as she packs up orders of her viral Beachwaver curling iron for six to eight hours at a time.\u00a0<\/p>\n
The stream on Nov. 20 had a party atmosphere, with Potempa taking breaks to dance to \u201cIn Da Club\u201d by 50 Cent in between shipping out orders. To the more than 1,000 TikTok users who typically tune in for Potempa\u2019s shows, this is entertainment and shopping all at once.\u00a0<\/p>\n
Beachwaver is part of a growing influx of retailers that are flocking to TikTok Shop, the video app\u2019s shopping service. TikTok Shop\u00a0launched in September 2023\u00a0as a way for users to purchase products without leaving the app, and since then, the China-owned app has emerged as a viable alternative for retailers looking to diversify their e-commerce business from\u00a0Amazon.\u00a0<\/p>\n
Via a dedicated Shop tab, retailers big and small promote products of all kinds, ranging from eyeshadow palettes, phone chargers, detox teas, treadmills and more. On TikTok, retailers typically offer generous coupons and free delivery within a few days. Shoppable posts, which look like normal videos but are ads for products sold in TikTok Shop, frequently appear in TikTok\u2019s main video feed, known as the \u201cFor You\u201d page. Those posts allow users to purchase products without exiting their For You feed.<\/p>\n
On Potempa\u2019s show, shoppers race to place an order to get a 50% discount on Beachwaver products and free add-ons to their order like face washes or lipsticks, along with the chance to have their username read aloud by Potempa while she packs their order on screen.<\/p>\n
\u201cWhen TikTok Shop was new and people hadn\u2019t used it yet, they would ask, \u2018Is this on Amazon yet?\u2019\u201d Potempa said in an interview. \u201cI would get those questions like, \u2018Can I buy it somewhere else?\u2019 Now that it\u2019s been around for a year or so, we\u2019ve done 1.2 million orders.\u201d<\/p>\n
ByteDance-owned TikTok has already cemented itself as an advertising powerhouse, and with TikTok Shop, the company has been trying to carve out another revenue stream through e-commerce. The company has attracted the likes of\u00a0Nike, PacSun and\u00a0Crocs, among others. Those retailers want to tap into the more than 170 million Americans on TikTok who shop on impulse as they scroll through videos.\u00a0<\/p>\n
They aren\u2019t the only ones.\u00a0<\/p>\n
Amazon sellers are also being persuaded to try out the service with promises of low fees and steep discounts on products footed by TikTok. Besides sellers, the company has also hired talent away from Amazon, filling key roles for TikTok Shop in areas like marketing, creator relationships, brand safety, category managers and operations.<\/p>\n
In the 15 months since its launch, TikTok Shop has emerged as a \u201cmassive\u00a0e-commerce\u00a0machine,\u201d according to\u00a0ecommerceDB, a market research firm. EcommerceDB predicts TikTok Shop will more than double its gross merchandise volume, or the dollar value of items sold on its marketplace, to $50 billion this year. That\u2019s a fraction of\u00a0Amazon\u2019s 2024 expected GMV of $757 billion, but nonetheless, TikTok Shop is making strides.<\/p>\n
\u201cEvery time you scroll, every other scroll is a Shop post, so they\u2019re making a lot of investment to encourage that in-app conversion,\u201d said Caila Schwartz,\u00a0Salesforce\u2019s\u00a0director of consumer insights and strategy for retail and consumer goods.<\/p>\n
Amazon spokesperson Mira Dix told CNBC in a statement that sellers are engaging with its store \u201cmore than ever before\u201d and seeing greater success. Dix said the company\u2019s services for sellers are optional, such as fulfillment, which costs \u201can average of 70% less\u201d than comparable two-day shipping alternatives.<\/p>\n
\u201cOur selling partners are incredibly important to Amazon, and we work hard to innovate on their behalf and support the growth and success of these businesses across all of their sales channels,\u201d Dix said.<\/p>\n
Beachwaver CEO Sarah Potempa hosts livestreams on TikTok Shop multiple times a week.<\/p>\n
TikTok\u2019s e-commerce push comes at a precarious moment for the company.\u00a0<\/p>\n
In April,\u00a0President Joe Biden signed a law\u00a0that requires ByteDance to sell TikTok by Jan. 19. If TikTok fails to cut ties with its parent company, app stores and internet hosting services would be prohibited from offering the app, amounting to a nationwide ban in the U.S. TikTok\u00a0has sued\u00a0to block the measure.<\/p>\n
President-elect Donald Trump\u00a0could rescue\u00a0TikTok from a potential U.S. ban. After trying to implement a TikTok ban during his first administration, Trump reversed his stance, acknowledging in a March interview with CNBC\u2019s \u201cSquawk Box\u201d that \u201cthere\u2019s a lot of good and there\u2019s a lot of bad\u201d with the app.\u00a0Trump\u00a0changed his position around the time that he met with billionaire Jeff Yass, who is a major investor in ByteDance.<\/p>\n
As the January deadline grows nearer, TikTok has largely been operating its business as usual.\u00a0<\/p>\n
Executives from TikTok Shop pitched its marketplace as a holiday shopping destination during an October event in Manhattan with business owners and social media influencers. Users have shopped hundreds of millions of units on its e-commerce platform since launching September 2023, said Nico Le Bourgeois, TikTok Shop\u2019s head of U.S. operations. Le Bourgeois, who joined TikTok in August 2023, previously spent nearly nine years at\u00a0Amazon\u00a0in a variety of divisions including its third-party marketplace.<\/p>\n
TikTok Shop isn\u2019t trying to sell \u201ceverything to everybody,\u201d Le Bourgeois told CNBC in October. TikTok Shop is a marketplace for product discovery that surfaces \u201cnew, cool, interesting\u201d items from big and small brands, he added.<\/p>\n
\u201cYou see it, you like it, you buy it. It\u2019s not a search,\u201d he said. \u201cIt\u2019s a very different way of shopping.\u201d<\/p>\n
Le Bourgeois declined to comment on the looming TikTok ban, but a company spokesperson at the event said TikTok Shop isn\u2019t slowing down.<\/p>\n
\u201cThe sellers here, creators, they\u2019re building their livelihoods on TikTok,\u201d the spokesperson said. \u201cWe\u2019re going to continue to show up for that. There\u2019s a huge opportunity for us.\u201d<\/p>\n
More Americans are expected to turn to TikTok and other China-linked apps for gift buying this holiday shopping season.\u00a0<\/p>\n
Roughly 63% of Western consumers plan to purchase from Chinese shopping apps during the season, according to\u00a0Salesforce. That includes TikTok, Alibaba\u2019s AliExpress, Shein, Temu and fast-fashion company Cider.<\/p>\n
On Saturday, TikTok said its U.S. Black Friday sales topped more than $100 million, with home goods, fashion and beauty products among the most popular categories. Canvas Beauty, a top seller of hair-care and beauty products on TikTok Shop, hit $1 million in sales within two hours of going live on the app, the company said.<\/p>\n
Retailers and sellers, some of which count TikTok for the lion\u2019s share of their online sales, told CNBC that they\u2019re sticking with the platform despite the possibility that it could disappear.<\/p>\n
Although it\u2019s impossible to ignore the conversation around a potential TikTok ban in the U.S. as a brand that heavily relies on the platform, Yay\u2019s Snacks co-founder and COO Rachel Cheng said she\u2019s not convinced that TikTok will go away under the Trump administration because it doesn\u2019t seem to be the president-elect\u2019s main focus.<\/p>\n
Yay\u2019s Snacks, which makes crispy Cambodian beef jerky, was one of the earliest companies to join TikTok Shop when it launched. Yay\u2019s founder and CEO Marlin Chan, a former YouTuber, frequently posts humorous TikTok videos promoting his snacks, which are based on his grandmother\u2019s original recipe. Among the videos is a series that parodies the show \u201cUndercover Boss.\u201d Those videos helped Yay\u2019s amass tens of thousands of TikTok followers, who keep buying the jerky, Cheng said.<\/p>\n
At one point, TikTok sales comprised nearly 90% of Yay\u2019s total revenue, with monthly sales from the app peaking at $75,000 last November, Cheng said. Yay\u2019s is prepared to divert to Amazon and\u00a0its own website\u00a0if TikTok is banned, but as long as TikTok is \u201cstill here, we\u2019re going to do what we can to stay on top,\u201d Cheng said.<\/p>\n
\u201cIf we were sitting here worrying about what\u2019s next, we would\u2019ve never gotten on TikTok Shop,\u201d Cheng said. \u201cWe\u2019re enjoying it while it\u2019s hot.\u201d<\/p>\n
Scrub Daddy, known for its smiley face-shaped sponges, went viral on TikTok during the Covid pandemic and counts more than 4 million followers. Its\u00a0top video, a demonstration of its Damp Duster sponge, has 30 million views while its bestselling product on TikTok Shop has been purchased nearly 76,000 times, according to the app. That figure doesn\u2019t account for items that have been returned after purchase.<\/p>\n
After kicking off in 2012 with an appearance on \u201cShark Tank,\u201d Scrub Daddy CEO Aaron Krause said he lost faith in traditional marketing efforts.\u00a0<\/p>\n
\u201cWe did a TV ad, we did some outdoor ads on billboards, we did a little bit of radio,\u201d Krause said. \u201cAll I found was that I was throwing money into the air.\u201d<\/p>\n
The company pivoted toward social media marketing, primarily on Instagram, which turned out to be a \u201cpot of gold,\u201d Krause said. Scrub Daddy set up an account on TikTok in 2020 and worked with influencers to promote its products, including\u00a0Vanesa Amaro, a popular account for housecleaning content with more than 5.7 million followers. After Amaro recommended the sponges to her viewers, Scrub Daddy sold 30,000 units in one weekend, Krause said.<\/p>\n
TikTok\u2019s \u201calgorithm just allows you to hit millions and millions of views with one hysterically crazy video,\u201d he said.<\/p>\n
In recent months, TikTok has encouraged retailers and sellers to host hourslong livestreams multiple times per week as a way to connect with shoppers. Many brands have invested in building out their own studios to record the shows or have hired talent to host them.\u00a0<\/p>\n
Scrub Daddy snatched up\u00a0longtime QVC host Dan Hughes\u00a0after he was laid off from the home shopping company in 2023. Others, like Beachwaver, have turned their CEOs into on-screen talent.<\/p>\n
TikTok Shop was a big topic of conversation at a conference for Amazon sellers in New York in October. A session on \u201chow to scale your brand\u201d with TikTok Shop drew a packed room of sellers who listened to e-commerce strategist\u00a0Rafay MH\u00a0talk up the potential for brands to haul in $8 million to $10 million in sales from TikTok in less than a year.\u00a0<\/p>\n
\u201cAmazon comes with a ton of competition,\u201d MH said. \u201cTikTok is the opportunity for free eyeballs and sales.\u201d\u00a0<\/p>\n
Many Amazon sellers have embraced TikTok after they were initially slow to join the platform, said Michelle Barnum Smith, who provides consulting services to online businesses.<\/p>\n
\u201cI was the bedraggled gold miner standing on the street corners of New York, saying \u2018There\u2019s gold in those hills,\u2019 and people were like, \u2018Yeah, sure,\u2019\u201d Barnum Smith said \u201cBut as soon as they started seeing their competition on there, or their buddy on there, they were like, \u2018I\u2019ve got to get on there.\u2019\u201d<\/p>\n
There\u2019s now \u201cextreme FOMO,\u201d or fear of missing out, among Amazon sellers to join TikTok even if it no longer exists in the U.S. next year, Barnum Smith said.\u00a0\u00a0<\/strong><\/p>\n \u201cWhatever the future looks like for TikTok Shop, they\u2019re happy to take that money now and get while the getting\u2019s good,\u201d Barnum Smith said.<\/p>\n Disclosure: CNBC owns the exclusive off-network cable rights to \u201cShark Tank.<\/em><\/p>\n<\/p>\n Sporting a sparkly dress and a Santa hat atop her distinctly pink hair, Sarah Potempa stood in front of her smartphone at her hair-care company\u2019s warehouse in Waukegan, Illinois. It was time to go to work.\u00a0 Potempa is a celebrity hairstylist who goes live on TikTok multiple times a week. During \u201cthe packing show,\u201d as […]<\/p>\n","protected":false},"author":0,"featured_media":12828,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-12827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/12827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=12827"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/12827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/12828"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=12827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=12827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=12827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}