Why TikTok Shopping Could Flop in the U.S.

5 minute read

TikTok users in the U.S. may not be ready to embrace shopping on the platform—despite the company’s apparent plans to build up its U.S.-based e-commerce operations, which Axios reported this week.

As TikTok continues to grow in popularity, it has rolled out a QVC-style shopping feature called TikTok Shop across Asia and parts of Europe. The service allows brands and creators to broadcast live and sell products directly to users in select markets—and with 1 billion active TikTok users, its reach could be enormous.

But expanding the venture in the U.S. won’t be easy, experts say. Livestream shopping has yet to achieve the mainstream adoption in America that it has in other places because U.S. consumers simply aren’t used to shopping that way.

The stakes for TikTok

TikTok is already making a killing in the digital advertising game. The company’s ad revenue is projected to triple in 2022 to over $11 billion, exceeding the combined sales of competitors Twitter Inc. and Snap Inc, according to market research firm Insider Intelligence. Success in the social commerce space—when consumer shopping experiences take place entirely on a social platform—would turn TikTok into an even more dominant force in the social media sector.

Still in early stages in North America and Europe, compared to Asia, social commerce is projected to account for $53 billion in sales in the U.S. this year and nearly $457 billion in China, according to Insider Intelligence.

A TikTok spokesperson declined to confirm whether it plans to roll out TikTok Shop in the U.S. In a statement to TIME, the spokesperson said the company is “focused on providing a valuable shopping experience in countries where TikTok Shop is currently offered across Southeast Asia and the UK, which includes providing merchants with a range of product features and delivery options.”

Why TikTok Shop could fall short in America

In China, livestream shopping on apps like WeChat, Taobao Live, and Douyin (the Chinese equivalent of TikTok) is already an incredibly popular and lucrative tool. A January report from consulting firm Accenture found that while eight out of 10 social media users in China use social commerce to make purchases, the majority of social media users in the U.S. and U.K. have yet to make a purchase that way.

Social commerce, which includes other forms of sales on social media beyond livestreaming, is expected to make up only around 5% of total e-commerce sales in the U.S. this year, compared to nearly 16% in China, according to Insider Intelligence. Meta, the parent company of Facebook and Instagram, is currently the social commerce leader in the U.S. thanks to the popularity of 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.

In markets outside of Asia, TikTok is reportedly already missing the mark in launching Shop. The Financial Times reported in July that TikTok Shop has “struggled to gain traction” with users and lost the support of influencers in the U.K., its first market outside Asia. TikTok Shop livestreams in the U.K. reportedly garnered poor sales despite the company offering financial incentives to encourage content creators to pitch products through the app.

Consumers need to have a good grasp on how livestream shopping works for it to take over in a new market, says Ying Zhu, an assistant professor in the Faculty of Management at the University of British Columbia’s Okanagan campus who researches digital marketing, consumer behavior, and social networks

“If they want to roll out in Europe and North America, they’re overly optimistic,” she says. “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.”

Zhu says consumer knowledge of technology in North America and Europe is notably lagging behind where it is in China. “China is a cashless society,” she says. “So you have very mature consumers who are already very used to purely digitized economic activity. They don’t need cash or a debit or credit card. All they need is a phone.”

Livestream shopping still has potential in North America and Europe, Zhu says, but not without some work. “It’s a really good concept,” she says. “But without building up infrastructure and educating consumers, suddenly dropping this idea into the market and expecting it to just be successful is kind of naive.”

Where TikTok has an edge

Despite the challenges, there is momentum for shopping and buying through TikTok right now, says Andrew Lipsman, principal analyst for retail and e-commerce at Intelligence Insider.

TikTok likely won’t ever be an “Amazon killer,” Lipsman says. But its unique algorithm could help break new ground in the social commerce space by turning social shopping into a more habitual practice.

“TikTok is really good at serving up the content that people want based on their behavior,” he says, and “if it can use its algorithm to tee up the right products,” that could lead to more frequent purchasing.

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Write to Megan McCluskey at megan.mccluskey@time.com