Reimagining Retail: How TikTok Shop Alters Livestream Shopping If It Stays, and What Happens If It Disappears | Feb 5, 2025

Summary

Behind the Numbers: Reimagining Retail – How TikTok Shop Alters Livestream Shopping

Podcast Information:

• Title: Behind the Numbers: an EMARKETER Podcast
• Host: Sarah Lebo, EMARKETER
• Episode Title: Reimagining Retail: How TikTok Shop Alters Livestream Shopping If It Stays, and What Happens If It Disappears
• Release Date: February 5, 2025

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1. Introduction and Context

In this episode of Reimagining Retail, host Sarah Lebo delves into the precarious status of TikTok Shop amidst potential legislative challenges in the United States. With TikTok facing a possible ban, the discussion centers on the implications for brands utilizing TikTok Shop and the broader impact on the livestream shopping landscape.

2. The Potential TikTok Ban and Its Immediate Impact

Sarah Lebo opens the conversation by addressing the uncertainty surrounding TikTok's future in the U.S., highlighting the President's executive order that postponed the ban by 75 days. She poses a critical question: "If TikTok does go away in those 75 days or sooner or further, how would it impact the brands that sell on TikTok shop?" (01:44).

Sky Canavez, EMARKETER analyst, responds by differentiating the impact based on brand size and dependence on TikTok Shop:

"Smaller brands that have gone all in on TikTok Shop, like Guru Nanda and Halara, are among the most vulnerable." (02:00)

Conversely, larger brands such as Pacsun and Tarte Cosmetics are better equipped to withstand the potential loss due to their diverse customer reach and multiple sales channels.

3. Brand Strategies and Contingency Planning

The discussion shifts to how brands are adapting to the uncertainty. Sky Canavez emphasizes:

"Everyone is looking at their alternatives right now to anticipate both an audience migration and a creator migration, as well as the brand migration." (03:20)

Jasmine Emberg adds that many brands are developing contingency plans to mitigate risks associated with TikTok’s volatile presence:

"There’s a lot of disillusionment as well among creators... It will be hard for the app to shake off the association with Trump." (04:21)

4. Alternative Platforms and Market Fragmentation

Exploring alternatives, the guests discuss potential competitors that could fill TikTok Shop’s niche. Jasmine Emberg notes:

"There isn't an exact replica for a TikTok Shop. TikTok has a unique blend of technology, media, and community." (05:41)

However, platforms like Meta, YouTube, Amazon, Shein, Temu, and RedNote are positioning themselves to capture some of TikTok’s shopping behavior. Sky Canavez forecasts significant opportunities for these competitors, predicting:

"Our forecast is that the number of social buyers surpassed 100 million at the end of 2024 and will grow by a few million more this year." (06:37)

5. The Rise of Livestream Shopping

A significant portion of the discussion focuses on livestream shopping, a feature that TikTok Shop has successfully integrated. Jasmine Emberg explains:

"TikTok really figured out how to make live shopping work again by putting creators first." (09:49)

Despite past failures by other platforms like Meta’s Instagram and Facebook in sustaining live commerce, TikTok’s seamless integration within its ecosystem has set a new standard. If TikTok Shop were to disappear, Sky Canavez anticipates:

"There will be a lot of competitors who rise up and try to take advantage of the opportunity that TikTok Shop has presented." (07:56)

6. The Future of Creator-Driven Commerce

The episode underscores the transformative role of creators in driving commerce. Jasmine Emberg highlights:

"Shopping is becoming more social and creator-driven, whether or not TikTok remains in the U.S." (11:58)

Creators are expanding their influence beyond TikTok, launching products and engaging with audiences across multiple platforms, thereby ensuring that creator-driven commerce continues to evolve irrespective of TikTok's fate.

7. Strategic Recommendations for Brands

Concluding the discussion, the guests offer strategic advice for brands navigating this uncertain landscape:

• Diversify Social Presence: Sarah Lebo advises brands to partner with creators who have strong followings across multiple platforms to avoid over-reliance on TikTok.
• Explore New Opportunities: Sky Canavez suggests that brands should explore and invest in emerging platforms and stay adaptable to unexpected shifts in consumer behavior.
• Focus on Seamless Experiences: Emphasizing the importance of user experience, Sky notes that the success of livestream shopping hinges on providing a seamless and engaging shopping experience through video.

8. Final Thoughts

As the digital commerce landscape continues to evolve, the potential disappearance of TikTok Shop serves as a pivotal moment for brands and marketers. The episode underscores the importance of adaptability, diversification, and leveraging creator influence to thrive in an ever-changing retail environment.

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Notable Quotes:

• Sky Canavez [02:00]: "Smaller brands that have gone all in on TikTok Shop, like Guru Nanda and Halara, are among the most vulnerable."
• Jasmine Emberg [04:21]: "There’s a lot of disillusionment as well among creators... It will be hard for the app to shake off the association with Trump."
• Jasmine Emberg [05:41]: "There isn't an exact replica for a TikTok Shop. TikTok has a unique blend of technology, media, and community."
• Sky Canavez [07:56]: "There will be a lot of competitors who rise up and try to take advantage of the opportunity that TikTok Shop has presented."
• Jasmine Emberg [11:58]: "Shopping is becoming more social and creator-driven, whether or not TikTok remains in the U.S."

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For more insights and analysis on the evolving landscape of digital media and retail, tune into Behind the Numbers by EMARKETER, available Monday through Friday on all major podcast platforms.

Transcript

[Sarah Lebo]

How are leading CMOs transforming marketing from a cost center to an engine for growth? Zeta Global explains in their new ebook, Driving growth in the AI the CMO's new playbook. Download it today. Find out more at the link in our show notes. Hello listeners. Today is Wednesday, February 5th. Welcome to behind the Reimagining Retail, an E marketer podcast made possible by Zeta Global. This is the show where we talk about how retail collides with every part of our lives. I'm your host, Sarah Lebo. Today's episode topic is the state of TikTok Shop. Before we get into that complicated topic, let's meet today's guests. Joining me for this episode, we have retail podcast regular, our analyst, Sky Canavez. Hey, Sky.

[Sky Canavez]

Hi, Sarah.

[Sarah Lebo]

Good to have you. Also with us, someone who's not on the retail podcast as often, but we love to have her. It's Jasmine Emberg. Hey, Jasmine.

[Jasmine Emberg]

Hey, Sarah. Hey everyone.

[Sarah Lebo]

Welcome back. Okay, let's get into it. TikTok was set to be banned in the US on January 19th. The app even shut down briefly in what to me felt very clearly like a publicity stunt. The president then signed an executive order allowing for a 75 day extension on the potential ban, which leaves us here in this confusing limbo period. There's so much to say about the ban that, that we could not possibly get to in this episode. I want to look specifically at TikTok shop and where we're at. So my question is, if TikTok does go away in those 75 days or sooner or further, how would it impact the brands that sell on TikTok shop? Sky, why don't you go first with this one?

[Sky Canavez]

Sure. So I think it really depends on the brand, their size and how much sales they're generating from TikTok shop online. Already there are some smaller brands that have been early adopters on TikTok shop. They've gone all in and they've become very successful and even become top sellers in their categories. One is like Guru Nanda pulling oil. Halara, an activewear brand, is another. So these would be among the most vulnerable. And then there are much larger brands like Pacsun and Tarte Cosmetics that have established a successful presence on TikTok Shop and also sell a lot, but they have many more options, options in terms of where, how they can reach customers and they would take a smaller hit. And then there are a lot of brands, I think, that don't sell on TikTok shop or have just started to. And some of those brands might be pausing or Waiting to see if it's really worth investing in the channel, because there's no point in making that big investment, both in time and resources, for a channel that may not survive or that could pose brand safety risks even if it does.

[Sarah Lebo]

Yeah, Halara is a good example. They're sort of like, my understanding, is kind of like a gymshark, like, activewear brand. I've been seeing them a lot more in Instagram ads as well. So I think it's clear that they're trying to have a presence outside of TikTok shop as well.

[Sky Canavez]

Right. And that's wise. I think everyone is looking at their alternatives right now to anticipate both an audience migration and a creator migration, as well as the brand migration.

[Jasmine Emberg]

Yeah, I think that's right. I think, you know, that's true for brands that sell on TikTok shop or any brand that uses TikTok in any capacity whatsoever. I mean, they're all looking for alternatives and putting together contingency plans. I saw this article actually in the Information the other day about an agency called Ghost Agency, which is specifically focused on TikTok shop, and it said that it had shut down its operations already because of the volatility. And so we haven't seen a mass exodus of creators or merchants or advertisers from the platform. But I do think a lot of them are starting to second guess how heavily they're relying on TikTok. I think there's a lot of disillusionment as well among creators. I mean, Sarah, you're right, it was a publicity stunt to shut down TikTok and then bring it back. And in many ways it worked well for TikTok in order to be able to show just how popular it was among users. And it gave Trump a big political victory. But that could be short lived. And I know we're not going to talk a lot about, you know, TikTok's alignment with the Trump administration, but it is going to be hard for the app to shake off the association with Trump depending on how, you know, the next 75 days or so play out.

[Sarah Lebo]

Yeah, and those 75 days are also confusing because it's unclear if this executive order was even constitutional. So I think it's just difficult to make any, any sort of prediction there.

[Jasmine Emberg]

Right. I mean, TikTok is operating in somewhat of a gray area right now. You know, the law is still on the books and it's Internet service providers and app stores that just have to trust that they won't be facing those hefty fines. And you know, as we're speaking, Google and Apple do not have TikTok available for download or updates in their, in their app stores, which also then, you know, is detrimental to TikTok's growth. Right. It can't add any new users and existing users can access that, but they can't update it, which could degrade the experience if this continues.

[Sarah Lebo]

So if TikTok shop does go away, is there a competitor that could fill its space? I've heard about Meta, YouTube, Amazon, Shein, Temu, RedNote. Is there another TikTok?

[Jasmine Emberg]

There isn't an exact replica for a TikTok shop. Right. I mean, it has this really unique blend of technology, of media, of community that really has been kind of the way that it's been able to drive sales. And we haven't really. That would be really difficult for any platform to replicate. I think, you know, Meta and other social platforms are going to capture some of that shopping behavior, but there's a long list of other beneficiaries. And it's also a really good moment right now for a lot of social shopping startups. We're seeing, you know, companies like Whatnot and Shop My really start to raise tens to hundreds of millions of dollars with investors betting that those are places that shoppers from TikTok might migrate to. And I think ultimately we're going to see a lot of fragmentation within the shopping landscape if TikTok shop were to disappear.

[Sky Canavez]

Right. I think because TikTok really showed how social commerce can work in a new way in the U.S. among U.S. consumers. And it's broadly based on the roadmap of its sister app Douyin in China, which in just a few short years became one of China's top e commerce players. And that's in a very, very competitive online retail market in particular. And it is that layering, starting with that strong entertainment and creator content foundation with very seamless commerce integration. So I found, like transacting on TikTok shop is superior to what other social platforms have been able to offer because it's an in app experience with the integrated payments and there's very little interact disruption to the user experience of being on TikTok and discovering products and then being able to buy them. But I think there will be a lot of competitors who rise up and try to take advantage of the opportunity that TikTok shop has presented, particularly because the social buyers are there. Our forecast is that that number surpassed 100 million at the end of 2024 and will grow by a few million more this year. So everybody's looking at that opportunity and how to make the most of those buyers who are predominantly Gen Z and millennial shoppers.

[Jasmine Emberg]

Yeah, and I think your point, sky, about creators is spot on. Right? I mean, TikTok really put creators first within the shopping experience. And we're seeing platforms from Meta all the way to some of these social shopping startups really offer incentives to a lot of creators to get them to their apps. And, you know, they're betting, of course, that if they bring the creators over, audiences and shoppers will follow. But that REM remains to be seen.

[Sarah Lebo]

Yeah, putting creators first feels to me like the key difference, one of the key differences between TikTok Shop and Meta's long since abandoned Instagram Shop tab. I kind of think that we might see something similar to that Shop tab come back now that Meta has seen TikTok's success play out. And Meta and YouTube will probably see some initial benefits from people migrating from TikTok. But I really think that the Chinese e commerce companies might have the leg up here because that's another advantage TikTok shop has is its direct ties to Chinese e commerce.

[Sky Canavez]

That's a strong possibility. Particularly, I think Temu could be a dark horse in this race. It's predominantly a shopping app and it's really used TikTok and other social platforms as a marketing channel. But it could very well seek to establish its own social platform. Its sister app in China, Pinduoduo, originally had a lot of social features like group buying, where you get your friends and family members to get in on a deal together. So there's definitely more social aspects of Pinduoduo in China that Temu hasn't yet rolled out. Livestream shopping is another feature that it incorporates.

[Sarah Lebo]

That's a good thing to bring up because something that has been blowing up on TikTok is livestream shopping. Other platforms have tried that for so long and not seen the same success. What happens to live commerce if TikTok shop goes away?

[Jasmine Emberg]

I think it will be a huge setback for live commerce in the US. I mean, a lot of the platforms or social platforms have tried and failed. I mean, you know, Meta shut down live shopping on Instagram and Facebook back in 2022 and 2023. And there's, there's a lot of, you know, underlying reasons for this. It was a time when their ad business was not doing well and it was shutting down a lot of commerce related features. But we do know that, you know, it really wasn't a mainstream shopping activity for its users. I think TikTok really figured out how to make live shopping work again by putting creators first. And it has been a big boon, especially for a lot of creator founded businesses. But I think the reason that live shopping worked or works so well on TikTok is because it's integrated into the TikTok ecosystem. Right? So you already have this wide base of users or shoppers and creators as well as the technology to support it all. And without that, I do think we'll see players like whatnot pick up some of that behavior and there's still going to be use cases for live shopping, but I just don't think that it's going to be as prominent as it has been on TikTok shop.

[Sky Canavez]

I would agree for the short term, but I think long term it's definitely going to take off more with the younger generations because what we see is Gen Z and Gen Alpha as well are really video first digital natives and they interact with the online world so heavily through video that it's going to come pretty naturally to shop via video. And I think TikTok shop was able to capitalize on that, you know, putting the livestream shopping into the video feed and getting, you know, promoting it heavily with deals and discounts and engaging content as well, and the creators. So it's really going to come down to who can offer the best and seamless and fun experience for those social buyers.

[Sarah Lebo]

We're talking a lot right now about if TikTok goes away. I mean, it might not, but whether or not there is a TikTok ban, how has the platform changed how people shop via social media?

[Jasmine Emberg]

Well, I, you know, I think we've talked about this a couple of times in different ways already on this podcast. But you know, it's really kickstarted this creator driven commerce. And what we're seeing is that shopping really across the board is becoming more social and creator driven. And I don't think that that's going to change with or without TikTok. I mean, we're seeing shoppers across platforms be inspired to buy from creator content. We're also seeing creator content really being moving off of social media into other channels, whether that's CTV or retail media or in store. And we're also seeing creator products, right, being launched. And so I think that that is going to continue to shape and reshape our shopping behavior whether or not TikTok remains in the U.S. yeah, I think.

[Sarah Lebo]

That creator products is a great point and that's something that a lot of YouTube creators or creators that have started on YouTube are really invested in. So that's definitely a place where we'll continue to see that. Okay, what about the brands that are currently selling on TikTok shop or aren't? What should brands do about TikTok shop right now to prepare for the uncertain future?

[Sky Canavez]

I think they still have to wait and see because there is a pretty steep learning curve to succeeding on TikTok shop. Most brands work with partner agencies. As Jasmine mentioned, one of those agencies is shutting down because it doesn't see the opportunity there being as compelling anymore. And it's also a very affiliate oriented model and some of the brands that do best have actually invested in having a very founder led presence on the platform. So that may not be feasible for many brands. So I think looking at other platforms, making sure that they're diversified across social following where users are and looking to those would be would probably be the best options. I mean, we may well be surprised by where users and buyers end up. As we saw the great TikTok refugee migration to RedNote, which is was a purely Chinese oriented app that suddenly got a huge American following for different reasons. I don't know if that means brands need to be there. Probably not to target US Consumers. It's great for targeting Chinese consumers because it is a leading lifestyle platform there. But I think where the social users and buyers end up will ultimately surprise us.

[Sarah Lebo]

Yeah. In my opinion that is why it's important for brands that are partnering with creators, which is most brands to partner with creators and influencers who have followings across platforms. You don't want to just partner with someone who has a million followers on TikTok but is under investing in Instagram or doesn't have a following that will follow them to other platforms. Awesome. Well, that is all we have time for today. Thank you both for being here. Thank you so much. Sky.

[Sky Canavez]

Thanks Sarah. Always a pleasure.

[Sarah Lebo]

Pleasure to have you. Thank you Jasmine.

[Jasmine Emberg]

Thanks for having me.

[Sarah Lebo]

Thank you to our listeners and to our team that edits the podcast. We'll be back next Wednesday with another episode of Reimagining Retail, an emarketer podcast made possible by Zeta Global. And on Friday, join Marcus for another episode of behind the Numbers E Marketer podcast made possible by Zeta Global.