The pros and cons of setting up TikTok Shop

TikTok Shop was launched in 2022 and is TikTok’s native ecommerce solution that enables sellers, creators, and affiliates to sell products directly on the platform using live shopping and shoppable videos. Last year, 47.2 million people in the US used it and that number is expected to rise steadily.

Growing pains are real

The reviews from shoppers are underwhelming. Shoppers feel like the shopping experience is flooded with lower quality goods, it’s hard to find what they are looking for, and that there are counterfeit goods all over the platform. TrustPilot’s 154 reviews give it a dismal 1.4 stars out of 5. 

From our conversations with brands, TikTok Shop also has some problems to work out on the vendor side. Brands note that success requires heavy integration and operational investment—especially for established brands. They also note that onboarding for enterprises is still a pain point.

Opportunity awaits?

Despite the issues, many brands are leaning in and finding success on TikTok Shop. Rapid ad product innovation from TikTok is driving superior results for some brands compared to Meta. TikTok wants TikTokShop to work, and will likely continue to invest in better features. Recently they came out with GMV Max which automates aspects of ad creation, targeting, and placement, using signals from both organic and paid traffic to optimize for product sales.

TikTok Shop also offers a wide variety of sales approaches. Brands that are willing to invest in great creative and test different formats find that live selling (QVC-style), influencer campaigns, gifting, and dynamic/smart ads are central tactics that work. What brands are finding is that TikTok Shop is somewhere between marketing and acquisition and requires its own specialized approach. 

Check out these experiences from brands we’ve recently interviewed:

“We just launched TikTok Shop for a few of the brands, and it's definitely still ramping up as we're learning. So it's not doing any crazy volumes right now, especially in comparison to what I've heard from some peers. But Gen Z, we know they don't like email and email is such a bread and butter channel. So we have to expand beyond that, and sometimes that means what we always thought from paid media perspective, being an acquisition channel, we probably have to segment that out now and kind of budget it to be an acquisition channel.”

VP, ECOMMERCE
$1B+ ACCESORIES BRAND

“We launched GMV ads and it takes three minutes to set up and the performance of them are just ridiculous. They outperform any Meta campaign and they also outperform any manual campaign that you would do.”

VP, OPERATIONS
$100M+ ACCESSORIES BRAND

“[We are] integrating TikTok Shops next year. It's actually a pretty heavy lift because you're actually shopping on their platform. There's a whole bunch of integrations where pricing, product fees, logistics on shipping the product out. It still involves heavy involvement of your DTC platform and back end ERP systems. ... It is an important space, because it's still growing. It hits a key demographic, like Gen Z, younger Millennials, Gen Alpha, who if you get them early, can become a longtime customer. I think that's important, but you have to launch it carefully.”

VP, ECOMMERCE
$1B+ SPECIALTY RETAILER