Second time’s the charm? UK TikTok Shop launches on Beta

TikTok has invited a select number of sellers to sign up to its latest version of TikTok Shop on Beta, before launching to the rest of the public.

Those who participate will be able to provide feedback for product improvement and get their hands on a 0% referral fee for the next 90 days.

A new and improved TikTok Shop could represent a mammoth business opportunity – the platform has over 1.6 billion users. 83% of these say TikTok plays a role in their purchase decisions, making it a prime platform for brand discovery.

It could also be a game changer for SMEs given that 47% of users say TikTok is the platform they use most to engage with smaller businesses.

Unlike its primary competitor Instagram Shop, TikTok Shop allows direct product buying from live streams and videos. The social commerce model will take 1.8% commission from sold products during the first 90 days, rising to 5% thereafter.

Can social commerce go TikTok viral?

Although the launch of TikTok Shop bodes well for business on paper, in practice its launch could be significantly more complicated.

This isn’t TikTok’s first ride in the rodeo of social commerce, after all. Culture clashes between TikTok’s Chinese owners and London staff tainted TikTok Shop’s UK launch in 2021.

Reports of burnout and tension between staff and former TikTok head of ecommerce Europe, Joshua Ma, led to an exodus of more than 20 members from the London team.

This rocky start was followed by a lack of traction, with the Shop operating at a loss and many live streams generating zero sales.

In sharp contrast, TikTok Shop has been a resounding success in Southeast Asia. In 2022, the platform reportedly racked up a gross merchandise value of $4.4 billion thanks to a network of agencies who manage livestream presenters and virtual shopfronts.

In comparison, social commerce in the UK is still in its nascent stages. In 2022, 22.4% of the population were ‘social buyers’. In China, this percentage was around 84% – one of the highest in the world.

In some ways, the new launch of TikTok Shop on Beta could be read as an attempt to clean the slate and compete against Meta’s Instagram social commerce model.

Could bad press get in the way?

Although TikTok is undoubtedly a popular platform, recent controversies have dented public trust in the app.

Just last month, TikTok was fined £12.7m for misusing children’s data and its CEO, Shou Zi, was questioned in the US Senate over concerns about data privacy and the company’s ties to the Chinese government. TikTok has also been banned from being installed on government and BBC devices.

Headlines exposing TikTok’s patchy data privacy could jeopardise TikTok Shop’s success, especially when considering users have to trust the app enough to hand over their payment details.

However, if lessons are learnt from TikTok Shop’s success in Southeast Asia and the dramatic episode between Ma and London staff, there’s hope.

TikTok will need to convince both sellers and shoppers that it has bolstered its data privacy security practices and that brands have fertile ground for scaling through social commerce.