Ten days ago, on January 21st 2025, we got a glimpse of the impact a TikTok ban would have on Social Commerce businesses. Even though the app only ended up being down for a few hours in the US, it showed hundreds of thousands businesses how dependent they had become on reaching their audiences through TikTok. Many have amassed millions of followers over the last few years, but have virtually no way to engage with them outside of the app. If TikTok goes away, so does their livelihood.
But even during this lingering stage of uncertainty, TikTok Shop entrepreneurs stay loyal to the app. Why is that? Why don’t they just switch to YouTube or Instagram as an alternative. The answer lies in the unique role that TikTok is playing in the world of Social Commerce.
TikTok paves the way for Social Commerce in the West
TikTok has undoubtedly changed the social media playing field. Since its meteoric rise in 2020, shot-form content has taken over every other western social media platform – YouTube, Facebook, Instagram, SnapChat. it forced its western rivals to innovate, or, at least, play catch-up. But TikTok didn’t stop there. Instead it continued to push the boundaries of what a social media app is able to do. In 2023 it launched TikTok Shop in the US. This includes possibilities for hosting live shopping events, using an E-Commerce store front in your TikTok profile as well as utilizing a broad network of influencers to further promote your products.
None of these options are actually new. In China they have been commonplace for years now, with platforms like TaoBao, XiaoHongShu and Douyin paving the way and live shopping making up almost 20% of all E-Commerce volume.
But it was new to the West, seamlessly integrating the entertaining and engaging aspect of social media with the smooth in-app purchase experience of E-Commerce. This was something the American social media landscape had not seen before, it was innovative, and it took off like a rocket.
TikTok Shop has brought Social Commerce to the masses
In a bit more than a year, hundreds of thousands of businesses started a TikTok Shop. Millions of users made purchases. Billions of Dollars in revenue were generated. On Black Friday 2024 alone, Americans spent more than 100 Million USD on TikTok. Now, that is still a long way from the social commerce numbers that are being reached in China, where a single live shopping stream can bring in that much money. But it shows that Social Commerce, thanks to TikTok Shop, has finally gone mainstream in the West. And it is set to keep on that trajectory. For the next five years, social commerce is projected to grow with a CAGR of 30%. This is comparable to the growth rates of E-Commerce in the late 90s.
And while the industry is still in its infancy, there is a sense of gold rush for those who joined the trend early. An entire ecosystem of TikTok sellers, influencers, agencies and live shopping experts is forming. It gives entrepreneurs new ways of reaching their customers and content creators new ways of monetization. It gives E-Commerce a chance to reinvent itself – away from boring and outdated-looking platforms like Amazon, away from painfully simplistic ways of customer acquisition like Facebook ads. Social Commerce gives anyone the opportunity to go niche, get creative and engage with their target audience in a meaningful way.
TikTok does social commerce better than any other western social media platform
Of course, TikTok’s competition is quick to play catch-up. Meta was trying to implement live shopping functionality into their apps. YouTube partnered up with Shopify to bring shoppable content to its creators. And Amazon tried tried to become more social by launching Amazon Live.
But none of those initiatives were particularly successful. Meta even ended up shutting down their live shopping initiatives altogether due to a lack of interest. YouTube failed to build storefronts that are comparable to the seamless in-app shopping experience that TikTok provides. And Amazon continues to be considered an E-Commerce marketplace, not a place for fun and engaging content.
On top of that, TikTok continues to innovate. They have their unique insights from the Chinese market, the most mature social commerce market in the world. They can implement all their learnings from Douyin, the Chinese TikTok equivalent, since they are operated by the same mother company, ByteDance. And they built a reputation of being the go-to app for Gen Z users that makes them particularly interesting for E-Commerce going forward.
TikTok’s battle for survival in the US
But even if competition can’t stop TikTok’s Social Commerce dominance, legislation could. If the app were to be forced to shut down completely, businesses would lose access to their audience as well as the functionality that makes social commerce work so well through TikTok. And as just discussed, there are currently no alternatives that entrepreneurs could pivot to. It would essentially kill hundreds of thousands of existing businesses.
Right now TikTok is doing everything in their power to avoid this scenario. And with Trump coming into power, they now got a 75 day extension to find a solution. As of now though, no one knows exactly how such a solution will look like. They might have to sell parts or even the entirety of the company. They might find a solution on a political level, making concessions to Trump and the American government. Trump himself seems not in favor of an all-out TikTok ban, so it will be interesting to see which role he will play in finding a solution that both keeps the app alive, but gives the US more control over it.
A TikTok ban would set back Social Commerce for years
Depending on the final outcome of this struggle for control over TikTok, the implications for the future of social commerce could be severe. If TikTok were to be completely banned, it would wipe out the majority of social commerce GMV currently created in the US (more about current TikTok Shop GMV here). For other social media platforms to reach the level of market penetration that TikTok is at would take many years. The pace of innovation within social commerce would also be slowed and potentially halted altogether.
To cut the connection to China – which is the declared intention of a TikTok ban – would at the same time disconnect the US from any advancements and learning opportunities of the Chinese market. As social commerce continues to grow and evolve in Asia, America would fall further and further behind in that area.
It is hard to predict if any of the western tech companies would step up to fill TikTok’s shoes as the leading social commerce platform, but at least in the previous years it did not seem like it is a priority for any of them.
And so the future of not just TikTok, but the entire social commerce industry depends heavily on the involved parties coming to an agreement. Only if TikTok can continue to operate will this industry continue to flourish and with it its hundreds of thousands of businesses, creators and influencers.