TikTok Commerce: How an entertainment app is transforming online commerce

by Sandra Katzenberger

TikTok Commerce combines two central sales channels: Shop Ads and the TikTok Shop. Store Ads can be booked directly in the Ads Manager and enable targeted product advertising within TikTok videos or livestreams. The TikTok Shop, on the other hand, is a fully integrated online store directly in the app. Users discover products, receive recommendations, buy, pay and return – all without leaving TikTok.

Sales are made via in-feed videos, live streams or the product showcase in the profile. With marketing or creator accounts, retailers can also advertise products without their own store.

There is also the new Shop tab as a central marketplace in the app's navigation menu, which users can use to discover offers, receive product recommendations and manage their orders. Accompanied by the Shop Ads function, this provides the opportunity to create targeted reach for individual products or entire collections.

With “Fulfilled by TikTok”, TikTok even takes over fulfillment including storage, picking, packing and shipping, similar to Amazon. As a further milestone, the Fulfilled solution noticeably reduces the workload for retailers.

The real engine of TikTok Commerce is the algorithm. It not only provides entertainment, but also personalized product recommendations based on likes, comments, dwell time or shared content. There are also automated advertising materials and intelligent landing pages. Provided the content is convincing, this combination increases the relevance of content and drives conversions at the same time.

Combined with automated advertising media, dynamic product landing pages and a secure checkout, a personalized, efficient and entertaining sales environment is created. This format is particularly attractive for young target groups who want to combine online shopping with entertainment.

TikTok Shop is already a popular sales channel in countries such as Indonesia and the UK. Here is an example from Indonesia: with viral sales hits such as the famous “Pickle Jars” sweatshirt, which a couple turned into a million-seller with a simple TikTok video. So if you want to sell with TikTok, you need perseverance, creativity and a willingness to get involved with the fast format.

Used correctly, TikTok Commerce offers enormous potential for retailers and sellers, but also requires a rethink. This is because traditional advertising materials hardly work here. Instead, creative and authentic content is required, ideally with a human factor. This is time-consuming, but necessary to create reach and trust. The TikTok affiliate program also offers enormous opportunities to build partnerships and collaborations that can become real revenue drivers through reach and proximity to the target group.

The algorithm and TikTok Commerce definitely offer opportunities to go viral. However, you need to be aware that this investment requires time, know-how and not least the courage to present yourself, and even then success is not guaranteed.

TikTok Commerce is already having an impact in markets such as the USA and the UK. The hashtag #tiktokshop has over 127 billion views. Trends emerge in a matter of seconds and products sell immediately. This makes TikTok not only fast, but also emotional, impulsive and approachable.

However, TikTok Commerce is not a sure-fire success, but nevertheless an exciting opportunity for retailers. Those who are prepared to invest in content, implement trends directly and meet customers at eye level can tap into new sales potential here. It is precisely the combination of algorithmic personalization, viral dynamics and low entry costs that makes TikTok Commerce a relevant player in the e-commerce of the future.

Sources: TikTok Shop and Showcase, TikTok Shop Ads, TikTok Commerce, targetlab blog, W&V