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TikTok is thinking inside the box on ways to monetize its ginormous user base beyond ad revenue.
And by inside the box, I mean inside the increasing number of shipping boxes TikTok’s ecommerce hub, TikTok Shop, is sending out to buyers in the U.S.
TikTok Shop has been around in the U.K. since 2021, but we just got it stateside in September, and sales are growing (but so are complaints about less-than-ideal seller-side experiences and reports of potentially dangerous “wellness” products being listed).
To help boost those sales even further, TikTok held a “BFCM” campaign, where it would subsidize deals from TikTok Shop sellers who offered discounts on their products during Black Friday and Cyber Monday.
Here’s how the campaign worked: if sellers discounted their products by at least one penny (yes, you read that right, one whole cent), TikTok agreed to subsidize discounts of up to 50% off orders over $100. Cosmetics brand Trio Beauty gave some hard numbers to Glossy, revealing that it discounted products by 30% for Black Friday and Cyber Monday. TikTok then swooped in and subsidized an additional 30% discount, meaning TikTok Shop buyers could get a product that normally sells for $19 for $7.45. That’s a 60% off deal, without Trio Beauty having to eat the additional 30% discount.
TikTok ate it instead (along with the cost of dozens of other deals, including one for Hank Green‘s Cancer Socks), and that’s an expense contributing to the ecommerce hub’s reported $500 million loss this year.
Seems sales + getting people talking about The Shop > profitability is all part of TikTok’s plan to cement itself as an ecommerce player.
But will that plan pay off?
I get into all this and more with my co-host Lauren Schnipper in the latest installment of Creator Upload. Subscribe on Apple Podcasts, Spotify, or whenever you listen. You’re gonna dig it.
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