Livestream marketing inspired shop in TikTok feature might someday become synonymous with Amazon

Social media influencers have got nothing to do with the quality of the brands they promote or do they? This question might get redundant as live stream marketing is catching up on the platforms like Tik-Tok and Instagram. Live streaming brings infomercials to the forefront of modern-day advertisement making them more personal and interactive. Inspired by this very prospect of making business, or rather garnering engagement, it unveiled its shop in TikTok feature for the US market. Though it has unveiled the feature for UK, and seven other countries in SE Asia, this recent move is a critical one at least for the management. Recently an FCC commissioner and two US Republican lawmakers have raised a proposal to ban the app with an advocacy group recommending the lawmakers launch an investigation into the company.  A report filed by Semafor says TikTok's e-commerce plans are part of the company's effort to foray into the global Livestream shopping industry, competing with China, a leader in this segment. A TikTok spokesperson explaining the potential of the shop in TikTok feature told Gizmodo: "We are always guided by demand and exploring new ways to enhance the TikTok experience. We've seen the positive impact of TikTok Shop, and we're excited to continue experimenting with this new commerce opportunity to support businesses of all sizes and enable our community to discover and engage with products they love."

The TikTok shop is embedded in the app allowing users to shop within the app. Semafor reports that TikTok is in talks with US business outlets to partner with the app in the TikTok shop initiative. It hasn't yet initiated any steps to collaborate with international players but will be included gradually. Even in the US, the app is open only for select players. Those who want to register must provide an "invitation code" to access the application. The step comes at the right time giving them an opportunity to take on major e-commerce dealers like Amazon enticing buyers with Black Friday reels.

But before jumping to conclusions, it should be remembered that TikTok is owned by ByteDance, a Chinese short video company. Livestream marketing works with a totally different audience, ie., those who are aware of the technology. China being a completely cashless society, TikTok's in-app feature has been successful. On the other hand, the US is seeing cashless transactions banned in one state after the other. Ying Zhu, a researcher in digital marketing, consumer behavior, and social networks notes, "If they want to roll out in Europe and North America, they're overly optimistic. It's a way more complicated phenomenon than just someone sitting in front of a camera selling products. It's easy for people to underestimate the complexity associated with this seemingly simple interaction." It has witnessed setbacks in non-Asian markets such as in the UK, with the total market slumping even though TikTok reportedly offered content creators financial incentives to create product pitches.

For US markets, in particular, Livestream marketing may not yield much profit as the social commerce segment including Livestream marketing makes up only for 5% of the total e-commerce sales in the US while China's share stands at 16%. In the US, its main competitor would be Meta for its very successful features like Facebook Marketplace and Instagram Shopping. "If social shopping got much more popular in the U.S. in the near future, it would still be a pretty small percentage of overall sales," says Emily Pfeiffer, principal analyst for commerce technology at research firm Forrester. Accenture in its report mentioned how China is ahead in leveraging social commerce to make purchases compared to US and UK.

In spite of positive projections, there is ample evidence that its ad revenue is slumping. The Financial Times reports, the short-video company has recently lowered its ad revenue target from $14.5 billion to $ 10 billion. Therefore, it only becomes imperative that TikTok reinvent itself with an out-of-the-box solution, which apparently should be a strategy for making shopping a habitual practice, read algorithmic suggestions, which TikTok is very much capable of. "TikTok is really good at serving up the content that people want based on their behavior," says Andrew Lipsman, principal analyst for retail and e-commerce at Intelligence Insider.