TikTok Tests In-App Check-Out: How Relevant Do We Think This is for Brands to Boost Sales?

TikTok has quietly launched its new in-stream commerce initiatives in the United States. It is a long-awaited in-app checkout feature for brands and marketers looking to capitalise on the #TikTokMadeMeBuyIt trend.

Pacsun, pop culture products boutique Three Little Mingos, and beauty brand KimChi Chic are the brands currently in beta. Revolve and Willow Boutique appear to be participating in the test as well. According to a spokesperson, TikTok is not confirming or naming merchants as part of the testing phase. Revolve did not respond to requests for comment.

The brand profiles include a small bag icon (similar to the Instagram Shop tab icon) that displays a variety of products and prices. Users can click on products to view an in-app version of the product page, complete with photos and videos, and then choose whether to add the item to their cart or buy it now. Users can also add items from different stores to the same shopping cart.

Many other brands, including Walmart, Target, Olay, e.l.f., Eos, Madewell, American Eagle, and Ulta, have a Shop tab on their TikTok profile. But customers are taken to the brand's website in-app to complete a purchase. Whereas customers of Pacsun, Revolve, Three Little Mingos, Kimchi Chic, and Willow Boutique can place orders within TikTok by entering their name, phone number, address, and credit card information.

TikTok first piloted live shopping with Walmart in December 2020 and then announced an integration with Shopify a year later. It is also noted that the platform launched several new shoppable ad formats in 2022.

It remains to be seen whether social commerce has widespread traction in the West. While Asian audiences are accustomed to mobile shopping, American customers prefer to make purchases on brand websites.

With TikTok and Instagram being used as search engines by Gen Z and #TikTokMadeMeBuyIt approaching 40 billion views, it is clear that TikTok's new move is to become a full-funnel sales platform.

Advantages:

On the customer's end, it eliminates unnecessary click barriers and streamlines the path to purchasing from their favourite brand in just 2-3 clicks. The ease of shopping can also help TikTok attract older users and change the image of the "Just for Dance" app.

Without a doubt, social media helps brands and marketers reach a wider audience and influences brand marketing and sales. With the simplicity of in-app shopping features on TikTok, brands can possibly improve customer experiences, increase customer engagement, and accelerate sales.

Disadvantages:

Although in-app purchase features give marketers and brands more opportunities to increase conversions, they also pose the greatest challenge to marketers.

Because by putting a platform like TikTok between a brand and a consumer, a direct connection to the customer and their data gets lost for marketers. In today’s market, with the demise of third-party cookies, first-party data serves as a gold mine for marketers.

It is outright crucial to target the right audiences and drive better personalization. This way, it leads brands to lose the potential opportunity of gaining insights from customers. While some brands may find this challenging, we believe brands in industries such as FMCG that don’t rely much on customer data can make the most from TikTok's new in-app checkout feature, which adds a significant value proposition for them.

Furthermore, in-app shopping is not a new feature. These types of commerce features were available on Meta's platforms, Facebook, and Instagram. But the difficulties the U.S. market has in making livestream shopping successful have forced Instagram to roll back its dedicated shop tab from users' feeds, and it is also sunsetting livestream shopping.

TikTok, on the other hand, is pushing in-stream purchase options. But how will TikTok make this option stand out on its platform? Will TikTok succeed in this attempt where Meta’s platform has failed?

As TikTok has already found success in live commerce in China, we believe it can possibly replicate the same success in the western market as well.