In China, it is predicted that more than 320 million people will make at least one purchase from a livestream this year. Furthermore, Live Stream Shopping is due to lead consumer spending in social apps which is due to hit $17.2B in 2025.

Here’s where TikTok comes in. In the latter part of 2021, TikTok launched a series of events that positioned the company as a competitor in the e-commerce space. TikTok hosted these events which fall under a flourishing digital experience called “live” or “social” shopping events. The events focus on marketing and selling the products of both well-known and upcoming brands, but they also offer consumers the opportunity to enjoy the entertainment provided by musicians and other popular content creators.

Fiance on TikTok

Here is just a quick summary on the main ways in which TikTok makes money.

At present, TikTok has several revenue streams. One major stream of TikTok’s revenue includes advertising revenues, which the company raises by charging other businesses to place their ads in front of audiences at various points of peoples’ sessions within the app.

Another source of TikTok’s revenue comes from the sale of TikTok coins. TikTok coins are in-app currency individuals can buy using fiat currency. With these coins, users can buy gifts they can send to other users. Recipients of these gifts can then exchange them for fiat currency which they can then withdraw to bank accounts. TikTok probably keeps a small commission of these exchanges, and may make a margin on FX rates too.

Thus, this venture into ecommerce marks another big channel for TikTok’s revenue potential. 

In terms of how its live shopping works, it is similar to teleshopping á la QVC. Live shopping on TikTok offers users the opportunity to see products showcased by creators in real time. However, live shopping on TikTok is more pleasurable to the viewer than teleshopping due to its simplicity and focus on shopping alone. Product placement ads during Friends? No thanks. 

The TikTok for Business eCommerce team describes live shopping as so:

“Live shopping allows brands to seamlessly integrate products from their TikTok Shopping experience into a live session. This lets merchants connect with their audiences in real-time and help users buy what they discover while watching a brand’s stream. live shopping gives users more opportunities to learn about, engage with, and shop from the brand.”

Live shopping is a win-win for both TikTok as a platform and its content creators. As the aoo gains traction, live shopping will provide the company with additional revenue by capturing a percentage of each sale. Brands of all sizes are looking for ways to get their products in front of bigger audiences, and partnering with content creators who have already-vast followings is a great way for these brands to accomplish this.

Live shopping via TikTok promises an array of benefits, all depending on whether the app’s users decide whether or not it is for them. 

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