Why TikTok livestream shopping is a hard sell for creators

It seems the #TikTokMadeMeBuyIt trend hasn’t jumped to live shopping. 

TikTok is known for viral commerce, with videos on the site boosting sales of everything from cleaning products to feta. Still, there are strong signs that livestream shopping is not among the platform’s strengths. Marketers say the live-shopping genre faces challenges, even beyond TikTok, for a number of reasons: customers prefer on-demand viewing instead of the scheduled live streams, and the creators, who would run the live sales, may not be natural sellers.
 
Uncertainties have been swirling around the prospects for livestream shopping in the U.S. and Europe, as more apps try to jam commerce directly into their products. Live shopping has been famously successful in Asia, especially China, where “Super Apps” have taken hold, providing all social media, commerce, services and content in one place. But Chinese-owned app TikTok reportedly had difficulties bringing live shopping to the U.K., which has shined a new light on why this consumer behavior is still elusive in Western markets.

U.S. consumers are not as hooked by livestream commerce, according to Rachel Tipograph, the CEO of MikMak, an ecommerce analytics platform that works with brands to power shopping events on TikTok, Twitter, Facebook, YouTube, Snapchat and Pinterest.

“Think about live events in the U.S., it’s usually sporting events or major award shows,” Tipograph said in a recent interview. “Outside of that, everything is on demand.”

Creators are another challenge, as flash sales pitches are not always one of their strengths. They might be great at making short-form videos, but answering questions from incoming commenters, being knowledgeable about a product and keeping up energy for a livestream may not be roles they are cut out for. 

“One of the reasons Douyin’s [TikTok’s Chinese version] shopping format is so successful in China is because of the revenue potential for brands and influencers,” said Sarah Penny, content and research director at influencer marketing platform Influencer Intelligence, in an email. “Douyin increased adoption among influencers by incentivizing them with commission.”

TikTok’s closest version of this is its creator fund, which has received some scrutiny as the platform grows.

There has been renewed focus on livestream shopping after the Financial Times reported that TikTok was having trouble with live shopping in the U.K. TikTok Shop launched in the U.K. last year, the first market outside Asia, allowing companies and influencers to sell products through livestreams. The plan was to have the feature expand to Europe, but it struggled to get traction, with several creators even dropping out of the project, according to the Financial Times. TikTok has since disputed that it planned to roll out to European markets, and instead will focus on making it work in the U.K. 

Live shopping is all about intentionality, says Aaron Levant, CEO of livestream platform NTWRK. “TikTok is an entertainment experience,” he said. “When I open the app for fun dance videos, my intention isn’t shopping.” Even though TikTok is popular with a wide reach, the audience is still young, and may not have the purchasing power to show conversions, he added.

Meanwhile, Amazon also is trying to spark interest in live shopping, looking to mimic what Chinese-based Alibaba has done overseas. This week, Amazon held its yearly Prime Day sales event, and livestream sales pitches were abundant on the site. But the main video on the Amazon Live page didn’t even reach 4,000 live viewers, and at some points, the “live” stream showed a pre-recorded clip. Amazon has had trouble retaining creators and attracting them from TikTok or YouTube. Creators said that livestreams didn’t have a strong or consistent following, even if they tried to get followers from social platforms to tune in.

In China, livestreaming sales are expected to hit $623 billion next year, according to eMarketer. By comparison, a recent report from research firm Coresight forecast $25 billion in livestream sales in the U.S. next year. Meanwhile, the concept of social commerce, which encompasses all sales on social media, live streaming or otherwise, is booming. Last year, eMarketer forecast social commerce sales would rise to $80 billion in the U.S. by 2025, and said more than half of 18- to 24-year-old Gen Z consumers were considered “social buyers.” 

Despite the hurdles, marketers are still optimistic about the future of live shopping in the West.

“[Live shopping] is a new way to experience products and allow each creator to be their own store,” Ryan Detert, CEO of influencer marketing firm Influential, wrote in an email. “Every platform is chasing a future where creators and commerce are interchangeable.” Detert claims that 20% of Influential’s client base has implemented live branded content into their strategies in the last few months.

Indeed, Amazon, YouTube, Snap, Pinterest, Meta and Twitter have all recently stepped up efforts in the live shopping space, and TikTok creators already host lives where followers can send gifts or tips.

Petco started doing livestream shopping events on Facebook Live in April of last year, highlighting products from its private labels, Youly and Reddy. The brand ran another in early December for the holidays. “Live social continues to be a success and we’ll have more live events on Facebook on the horizon later this year,” according to a Petco spokesperson.

“At a high level, I remain extremely bullish about TikTok as a commerce strategy channel,” said Tipograph. She added that in 2020, TikTok accounted for less than 1% of all traffic to sites for MikMak clients, often Fortune 1000 consumer product brands. TikTok now accounts for 5% of total traffic. When it comes to conversion rates, TikTok can be in the third or fourth on the list of drivers, with an average conversion rate of 5.4%, according to MikMak data. That rate jumps to 7% when focusing on Gen Z.

Avi Ben-Zvi, VP of paid social at Tinuiti, a performance marketing firm, said he has been having live shopping conversations with clients. “The general feeling is that the idea is popular in other markets, but just hasn’t caught on here yet,” he said. “TikTok has already changed the way we think about social media and entertainment. Who’s to say they can’t figure it out?”