Will 2024 be the year TikTok converts Western consumers to its in-stream commerce options?

Over the past few years, TikTok has been working towards maximizing its in-app sales in its bid to try and gain the maximum revenue opportunities. In China, where its home market lies, the app with the local version Douyin has already achieved generating a lot of income from in-stream sales in the market. This will be a template for it to replicate across markets elsewhere-including the US. 
But so far, customers from the West have not showed much enthusiasm for in-stream shopping, and the company has had to go back to the drawing board after several failed attempts.

But now it is set to make another push on eCommerce, with Bloomberg reporting that TikTok's aiming to "grow the size of its US e-commerce business tenfold to as much as $17.5 billion this year."

How it plans to do so, however, isn't particularly clear.

In fact, the biggest driver of in-app shopping on Douyin is live streams, and streaming commerce has become a behemoth industry in China. Again, though, it hasn't been as successful with building impulsive purchasing during any live broadcast.

That might simply be an aversion to spending in general on TikTok (given worries about its Chinese ownership), or it might just not be the case that live-streaming hasn't taken off quite like it has on other platforms-but that it hasn't brought its A-game isn't exactly a reason to celebrate its sister's success.

Even so, spending in TikTok as a whole is gaining speed.

According to data.ai, last month, users in TikTok spent $3.8 billion in the app across the entirety of 2023, up 15% year-over-year.
U.S. consumers have contributed in large part to that, though most U.S. acquisitions have been on TikTok Coins, a feature that allows users to buy virtual gifts in the application that could then be redeemed for currency in the real world.

So while U.S. users aren't necessarily buying products via TikTok Shop, the fact that they are willing to spend in-app is a positive sign, which TikTok clearly sees as an opportunity for expansion.

So how will TikTok look to extend its shopping behaviors?

One option could be to incorporate food delivery, which has proven to be a winner on Douyin.
Douyin has also ventured into local services due to its content feed of local content, which focuses on videos from local users and businesses.

Starting with more smaller-convenience items may eventually help TikTok increase its utility and get even more people spending within the app in more different ways as it has also been working on its own versions of products like Temu in-stream.
Chinese retailer Temu has quickly become a massive player in Western markets, through sometimes lower-than-cost deals that lure consumers into buying. And although the products they are selling don't always have high quality, the thrill of shopping without breaking the bank has won many, which TikTok is now also pursuing to extend its shopping behaviors.

Because for TikTok, this is its key pathway to revenue success.

And not just for TikTok itself-and worth noting, TikTok is also raising its merchant fees, starting in April-but also for creators, whom TikTok needs to get paid to keep them posting.

TikTok still doesn't have a good revenue share process, with its Creator Fund becoming ever more dysfunctional, and ad share processes still not a practical option.
Commerce integrations give it more direct opportunity, both as influencers' salespeople and spokespeople for brands, and that may become one of its main lifelines to keep those top creators posting more frequently if it can induce more users to make direct purchases in-stream.

There are still so many questions and so many 'ifs' in the commerce calculations of TikTok. But that opportunity is there, and if it can get more of the young ones, especially, to use it more actively as a key product discovery and shopping platform, that would pretty much cement that business.

Meanwhile, get ready for Amazon's spending on Washington-based lobbyists to balloon along with TikTok's plans. When - if- TikTok succeeds, the demands for banning it will resurface again.