The popular short-form video platform, TikTok is making a significant foray into e-commerce with the launch of TikTok Shop in the United States, following its successful introduction in the UK. Users of the platform in the US can now buy stuff directly in the TikTok app.
The move holds the potential to reshape the e-commerce landscape not only in the US but also in countries like Nigeria, where online shopping and digital commerce are experiencing rapid growth.
With the online marketplace integrated into the TikTok app, users can purchase products directly from videos posted by brands and creators. When users search for products or watch videos, a dedicated “Shop” tab and a “Shop” button within videos provide quick access to related items.
Along with the marketplace, TikTok is also introducing a new affiliate program that will let creators get commissions on products they sell in both videos and livestreams without needing to work out deals outside of TikTok itself. The program is meant to incentivise creators to engage more actively in e-commerce, potentially leading to a surge in product endorsements.
Coupled with all this, TikTok now has its own fulfilment centres, so products can be stored and shipped by the company itself, just like Amazon.
The move confirms a Bloomberg report last week that users were seeing the new Shop tab in the app, hinting that a launch could be imminent. In fact, rumours that TikTok would soon unpack its new e-commerce Amazon alternative in the US have been rolling around for weeks now.
Read also: TikTok now allows users make posts in text format as social media competition tightens
What TikTok shop could mean for e-commerce in Nigeria
According to a report, the social commerce industry in Nigeria is expected to grow by 46.0% on an annual basis to reach US$1156.1 million in 2023. The industry is expected to grow steadily over the forecast period, recording a CAGR of 27.2% between 2022 and 2028. The social commerce GMV in the country is thus expected to increase from US$1156.1 million in 2023 to US$4889.2 million by 2028.
Social media channels like Facebook, WhatsApp, Twitter, Instagram and TikTok are already proving to be effective tools for companies and businesses in Nigeria, both small and large, to connect with their target audience and drive sales. It has become an essential part of their marketing strategies, with many companies investing heavily in social media campaigns to reach a wider audience.
While TikTok Shop is initially launching in the US and the UK, its impact could resonate with social commerce and e-commerce trends in Nigeria and across Africa. In Nigeria, statistics show that TikTok makes up 47.7 per cent of 34 million social media users in the country. The app is dominated by young people as well as adults who now use it as their go-to social media platform in Nigeria.
With the potential for its online marketplace to launch in Nigeria soon, its interactive and visually engaging platform could even attract more users to explore products and make purchases through the app. This could lead to increased engagement and a surge in online shopping activity among Nigerians.
Its affiliate program which would motivate Nigerian content creators to actively participate in e-commerce promotion, could also be another revenue source for content creators on the app, just like Twitter.
However, while this may be beneficial for online shopping and businesses, TikTok Shop’s emergence may challenge existing e-commerce platforms in Nigeria like Jumia and Jiji. With an already tense competition between the social and e-commerce industries, e-commerce platforms may need to innovate and enhance their offerings to stay relevant in the midst of growing competition.
Read also: E-commerce still accounts for the largest chunk of global digital economy despite challenges
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