Many tech platforms curry favor with brands by offering flashy shopping updates at retail conventions, but few will do so immediately after lawmakers threaten to ban them. But that's the awkward position TikTok is in, he said at a retail conference in Las Vegas this week.
The company took to the Shoptalk floor to talk about TikTok Shop and tout its latest updates, including new ad formats and placements. In the process, it certainly hoped to downplay the existential threat facing the company.
But it's hard to escape the fact that the big appeal for brands and retailers is their huge appeal to Gen Z and others in the US, and now that could be reversed. Last week, the House of Representatives passed a bill that would require the company to transfer the business to American owners or sever ties with U.S.-based users.
Since the news broke, TikTok has continued to have private conversations with advertisers while attempting to negotiate with the government, which views its relationship with Chinese parent company ByteDance as a national security threat.
The exact nature of the conversation is unclear, as TikTok declined to discuss the matter. But the magazine said the topic didn't come up much as delegates discussed the retail convention, which drew more than 10,000 attendees including brands, aspiring advertisers, and more than 900 technology platforms and solution providers. insisted.
Lei Kao, TikTok's global head of monetization product solutions and operations, told WWD, “I believe that most of the advertisers are very focused on the business itself, so people are excited about that. I don't think they're paying attention at all.”
“I believe that [there] In fact, the current market has a lot of confidence in us,” he said. Cao believes that more than any other time in the nearly five years he has worked at TikTok, “now is a really good time for us to focus on the business and keep moving forward.”
There's a lot to note in that regard.
TikTok Ads Manager now supports video, live, and product card formats.
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By all accounts, TikTok has established itself as a cultural phenomenon, with 150 million monthly users in the U.S. and #TikTokMadeMeBuyIt posts approaching 7 billion views. The company plans to channel all of its popularity into fast-growing shopping destinations. “TikTok's vision is to power commerce on this platform, always and everywhere,” Cao said. Because we're already seeing that users really want that kind of behavior. ”
Enter the TikTok shop. The company's goal is to increase its U.S. gross merchandise value to $17.5 billion this year, according to Bloomberg. If that happens, GMV in 2023 will increase tenfold.
The social commerce service was launched last September after years of testing. So even if it's been around long enough to build enough buzz, it's still an early product. For example, it may seem strange that the plethora of social video networks introduced video shopping advertising to the world only recently. Again, creating a fun feature that captures dance trends is different than releasing a business tool.
TikTok says it has built an ecosystem of technology and e-commerce partners, including Shopify, to simplify onboarding. Thanks to new data connections and pre-populated campaign settings, TikTok's Shopify app allows merchants to create and launch video shopping ads in just a few clicks.
Let's take a look at how video shopping ads work.
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“Large advertisers have huge catalogs, so we are also focusing on catalog and carousel formats to give advertisers easy access to these formats and ensure a wide variety of ads. I'm ready for a demonstration. [their] TikTok added that it specifically consulted with apparel brands as fashion is an important area for the company.
TikTok has also expanded Shop ad placement within its app, so brands can now use images from their existing product catalog to highlight and sell products directly in the new TikTok Shop tab. The Ads Manager dashboard now supports video, live, and product card formats.
According to Kao, TikTok is focused on removing barriers and frustrations for sellers so they can have “the best experience on TikTok, instead of spending a lot of time learning how to use TikTok.” It is said that there is. But this is a process, so developers and engineers will continue to hone it for the rest of the year, he added.
The efforts don't end there. The company has a deep interest in new technologies like Apple's Vision Pro. TikTok was one of the early developers to release apps for mixed reality headsets, allowing users to watch videos with virtual Yosemite or moonscapes, for example. The TikTok shop isn't there yet, but Cao finds this and other prospects intriguing.
Whether the shops can one day get there depends on the U.S. Senate. If the bill passes there, President Joe Biden said he would sign it. This would be a five-alarm red flag for TikTok, especially after user growth reportedly stumbled for the first time after the House vote, said people who spoke to the Wall Street Journal.
TikTok may be trying to downplay the situation with its business partners, but its alarmism is reflected in an official statement describing the bill as “a complete ban on TikTok, no matter how hard its creators try to hide it.” It is clear from It added: “This bill would trample on the First Amendment rights of 170 million Americans and deprive 5 million small businesses of the platform they rely on for growth and job creation. ” also stated.
It's difficult to predict what will happen next. Like other issues, the political debate surrounding the app is divided, so TikTok's fate is still undecided.
At least some people are taking uncertainty positively. Like Amber Venz Box, co-founder and president of his creator-driven shopping platform LTK (previously He RewardStyle and His LikeToKnow.It).
“Last year, the average adult user in the United States spent 53.8 minutes every day on TikTok alone. If TikTok were to be banned, that discretionary time would be lifted and shifted to another social media platform that fills the entertainment gap. That's probably it,” Wentz Box told WWD. “Brands evolve, just like creators and consumers.
“Brands are no longer taking a platform-specific approach,” she added. “[This] This is just another example of why creators can't rely on just one platform to build and grow their business or engage their community. ”
