TikTok Ventures into E-Commerce with Shopify Ad Deal
Published by
TikTok has made a big move into social media after inking a deal with Shopify, a Canadian multinational e-commerce firm, to enable brands to sell their wares via the viral video app.
Ottawa-based Shopify is adding TikTok to a portfolio of partners that comprises other social sites like Facebook, Instagram and Pinterest, as well as Google, Amazon and Walmart’s marketplace.
The tie-up will be rolled out in the United States next week before branching out into Europe and South East Asia in 2021.
TikTok’s Vice-President for Global Business Solutions Blake Chandlee said the synergy with Shopify would help merchants “reach new audiences and drive sales on TikTok.”
Social commerce is finally beginning to blossom in the US following a massive advancement in China in recent years, spurred by apps like WeChat, Kuaishou and Pinduoduo.
Research group eMarketer forecasts social commerce sales in China will rise to Rmb. 1.7 trillion ($253 billion) this year relative to below $20 billion in the United States last year.
TikTok’s move is coming on the heels of Facebook’s inauguration of its Shops platform of digital storefronts in May. A couple of US brands on Instagram have been able to provide direct checkout within the photo-sharing app since 2019.
According to Satish Kanwar, who heads Shopify’s Channels division, TikTok has swiftly gained traction among retailers with a big “influencer” audience.
“It was obvious early on how (TikTok) was starting to influence commerce trends and trajectories,” he said. “With direct-to-consumer brands, that relationship between storytelling and entertainment and the product they sell is so close.”
The Knot Pillow, Brooklyn Tea and Adwoa Beauty number among Shopify merchants already using TikTok.
Shopify has emerged one of the major beneficiaries of this year’s e-commerce boom, with its shares almost tripling in value since mid-March, giving it a market capitalisation of over $125 billion. It is anticipated to report quarterly revenues of more than $650 million on Thursday when it issues its latest earnings, an increase of 67 per cent over the third quarter of last year.
TikTok’s resolve to ally with a third-party platform like Shopify contrasts with the approach of its parent company ByteDance in China. Douyon, TikTok’s equivalent, blocked its users from connecting to marketplaces like Taobao and JD.com earlier this year, driving them towards its own platform.
It confronts increasing scrutiny over its Beijing roots, and still faces a potential ban in the US from President Donald Trump over security concerns.
“We believe video is the default form of communication online today,” Mr Kanwar said. “We are very eager to see how video and commerce can expand.”
