TikTok has exploded in popularity in a few short years, becoming one of the most widely used social media platforms globally. As of January 2023, TikTok has over 1.2 billion monthly active users worldwide (https://www.enterpriseappstoday.com/stats/tiktok-statistics.html), making it an attractive potential sales channel for businesses and creators.
With TikTok’s built-in ecommerce and advertising capabilities, the platform presents a major opportunity for brands to engage with new audiences and drive sales. In this article, we’ll explore whether selling on TikTok is worth it for businesses. We’ll look at key stats, features, successful brand campaigns, tips, risks and more to help you determine if TikTok should be part of your social commerce strategy.
TikTok’s Large User Base
TikTok has seen exponential growth in its user base over the past few years. According to TikTok User Statistics 2024: Everything You Need To Know, TikTok now has over 1 billion monthly active users globally as of September 2022. In the US alone, TikTok is estimated to have 73.7 million monthly active users. The 50+ Important TikTok Stats Marketers Need to Know notes that TikTok’s user base skews young, with 43% aged between 18 and 24. 60% of TikTok’s users are female. The largest user bases are found in urban cities and metropolitan areas.
A key driver of TikTok’s growth is its extraordinarily high engagement rates. The average user spends 52 minutes per day on the app, more than any other social platform. TikTok’s algorithm is finely tuned to serve relevant and captivating content to each user, keeping them engaged for long periods. This presents a major opportunity for brands to reach and connect with users in an authentic and viral way.
TikTok’s Commerce Features
TikTok has rolled out several features to make shopping and selling directly on the platform easier. Most notable is TikTok Shop, which allows brands to create digital storefronts showcasing their products [1]. Users can browse these shoppable videos and make purchases without leaving the app. TikTok also lets brands tag products in their videos so viewers can tap to learn more and buy [2].
Affiliate marketing is another way brands can monetize on TikTok. They can share affiliate links in their profiles that give creators a commission from any resulting sales. This incentivizes influencers to partner with brands and promote their products to their followers [3]. Overall, TikTok is making ecommerce seamlessly integrated to help businesses reach new audiences and drive sales.
Successful Brand Campaign Examples
Many major brands and companies have leveraged TikTok to great success. Here are some case studies that showcase effective strategies on the platform:
KFC launched the #KFCStyle dance challenge, encouraging users to create dance videos set to a catchy jingle. The campaign generated over 6 billion views and 10,000+ user-generated videos (https://partners.tiktok.com/success-stories/). KFC attributes a 12% sales increase to this viral TikTok campaign.
Home goods retailer Wayfair used TikTok’s shoppable video ads to promote their products. They gained 190 million video views and saw a 40% lower cost per purchase compared to other platforms. Wayfair called it their “fastest path to revenue on any advertising platform” (https://popularpays.com/blog/tiktok-case-studies/).
Sephora partnered with TikTok influencers to showcase their products and drive traffic to their online store. They achieved 21 million views on the #SephoraSquad hashtag campaign. Sephora said TikTok provided their highest return on ad spend (ROAS) ever.
These examples show that creative challenges, shoppable content, and influencer marketing can be very effective techniques for brands on TikTok. The platform’s engaging culture and video-first format offers opportunities for viral reach and direct sales.
Tips for Selling on TikTok
TikTok presents unique opportunities for businesses to engage with users and drive sales. However, selling on TikTok also requires adapting content and marketing approaches to fit the platform. Here are some tips for successfully selling products and services on TikTok:
Create short, engaging video content. TikTok videos are restricted to 60 seconds or 3 minutes for longer form content. Videos need to quickly capture attention and get to the point. Use eye-catching visuals, transitions, text overlays and other creative elements to tell your brand’s story.
Utilize hashtags and trends. Include relevant hashtags in your captions to make it easier for users to find your content. Jumping on trending hashtags and challenges can also help expand your reach. But focus on trends that authentically align with your brand.
Partner with influencers. Influencer marketing is key on TikTok. Consider collaborating with creators who appeal to your target audience. Make sure to choose influencers who genuinely connect with your brand.
Promote product links. Optimize your profile and videos to drive traffic to your online store. Use links in bios, captions, stickers and TikTok’s auto-link feature. Promote limited-time offers to create urgency.
With the right strategy tailored to TikTok, businesses can turn the platform’s highly engaged users into loyal customers.
Driving Sales Through TikTok Ads
TikTok offers a variety of ad formats to help businesses drive sales. Two of the most popular are In-Feed ads and Brand Takeover ads.
In-Feed ads appear between videos in a user’s feed, similar to ads in Facebook or Instagram Stories. These ads can showcase products and include a link for users to purchase directly from the ad. Brand Takeover ads display when the app is opened and provide full screen exposure for maximum impact. They are an effective way to raise brand awareness among TikTok’s massive user base.
When creating TikTok ads, businesses should follow best practices like:
- Using short videos that showcase products in real-world settings
- Leveraging influencer marketing by partnering with popular creators
- Testing different ad formats to see which perform best
- Creating targeted audiences based on interests and demographics
- Analyzing performance data to optimize campaigns
With compelling video ads and strategic targeting, TikTok provides an avenue to drive conversions and sales for ecommerce brands. As noted in this guide by Growmojo, “TikTok is the perfect platform to advertise products or services to Millennials and Gen Z” (source).
Analytics and Optimization
To maximize the effectiveness of your TikTok marketing, it’s critical to leverage the platform’s analytics tools to gain insights into your content’s performance. Some key metrics to track include:
- Impressions – The number of times your content is displayed to users.
- Reach – The total number of unique accounts that have viewed your content.
- Engagement rate – The amount of engagement (likes, comments, shares, etc) divided by impressions.
- Video views – The number of times your video has been viewed for at least 2 seconds.
- Followers gained – The number of new followers acquired.
By analyzing your metrics over time, you can identify high-performing content to replicate and lower-performing content to optimize. You’ll want to regularly A/B test elements like captions, hashtags, video creative, etc. to determine what resonates best with your target audience. For example, testing different captions or even slight creative variations can impact engagement dramatically. Continuously refining your strategy based on performance data will help boost your content’s reach and results on TikTok.
Sources:
https://spacecoastdaily.com/2023/12/tiktok-analytics-tools-unlocking-the-power-of-data/
https://minter.io/tiktok-analytics
Risks and Challenges
Selling on TikTok does come with some risks and challenges that brands should be aware of. One of the main risks is difficulty maintaining high engagement and growing an audience of followers over time. The TikTok algorithm is constantly changing, making it challenging for brands to keep their content being shown to new users organically. Brands may need to invest more in TikTok ads over time to reach new audiences as organic growth slows down.
TikTok’s algorithm also lacks transparency, meaning brands can’t always tell what kind of content will perform well or be promoted by the platform. Sudden algorithm shifts could cause branded content to stop reaching followers if it doesn’t align with what TikTok is currently boosting. Brands will need to stay adaptable and keep testing different content formats and strategies.
Additionally, selling on TikTok requires an investment of time and resources to consistently create engaging video and other content daily. The pace of content needed to stay relevant on TikTok is higher than other platforms. Brands must weigh the required time and staffing needs versus potential sales revenue driven through TikTok. While the platform offers a massive potential audience, turning views into sales takes careful testing and optimization.
Should You Use TikTok for Your Business?
When deciding if TikTok is right for your business, weigh the potential benefits and risks:
Pros of using TikTok:
- Reach a massive audience – over 1 billion monthly active users
- Connect with younger demographics that use TikTok daily
- Leverage viral content and trends for growth
- Creative video ad formats optimized for mobile
- Relatively low cost advertising compared to other platforms
Cons of using TikTok:
- Uncertainty around long-term platform stability and data privacy
- Requires dedicated resources for content creation and community management
- Video ads can be skipped after a few seconds
- Harder to track ROAS compared to channels like Facebook
Tips for getting started:
- Create a business profile and optimize it fully
- Engage with your audience by participating in trends, challenges, and duets
- Post 3-5 videos per week consistently
- Use relevant hashtags to increase discoverability
- Collaborate with influencers in your niche
- Run TikTok ads to expand reach and drive conversions
- Analyze performance data to refine your approach
With a thoughtful strategy, creative content, and some trial and error, TikTok can become a valuable marketing channel for your business.
Conclusion
TikTok has clearly demonstrated its power as an emerging platform for brands looking to drive awareness and sales. With over 1 billion monthly active users, it provides access to a massive audience and powerful commerce tools. Successful TikTok campaigns from major brands like Chipotle, E.l.f. Cosmetics, and Ralph Lauren show the platform’s potential for lead generation and conversions when creative and authentic content connects with users.
For brands considering TikTok, focus on providing value to users through entertaining and educational content. Leverage TikTok’s creative formats like challenges and hashtags while developing a unique brand voice. Monitor performance closely and optimize campaigns based on data and learnings. Consider amplifying branded content through TikTok’s self-serve ads to expand reach. While risks like loss of control over brand image exist, the marketing opportunity TikTok presents likely outweighs the costs of experimenting on this high-growth platform. Commit to a test-and-learn approach, partnering with influencers when possible, to determine if TikTok is a fit for your brand.
