TikTok Shop may be the new frontier of eCommerce, but does it work? Businesses have certainly taken notice of TikTok and are intrigued by the potential of leveraging such a large, engaged and well-segmented user base. While there are many reasons to use TikTok Shop, it also is not an ideal choice for every brand or business. This blog will explain 6 reasons why you shouldn’t invest in TikTok Shop and why it matters.
What is TikTok Shop?
TikTok has grown rapidly since its launch in 2016. The social media platform currently has 1 billion active monthly users worldwide. In 2023, the launch of TikTok Shop created a “one-stop eCommerce solution for driving sales and brand growth” within the app. According to TikTok: “TikTok Shop allows sellers to sell products directly on TikTok through in-feed videos, LIVES, and the Showcase tab. It enables product discovery, product details, checkout, and post-payment activities all within the TikTok app.”
6 Reasons Businesses Should Avoid TikTok Shop
- Misaligned Target Audience
A lot of businesses are omnichannel or multichannel, but that doesn’t mean every selling channel makes sense for every business. This is especially true when it comes to newer platforms like TikTok, where the general audience skews younger. If your product or brand has a target audience that’s over 40 years of age, it likely doesn’t make sense to invest in TikTok Shop at this time. This is because the majority of TikTok users are Millennials and Gen Z. Be sure to research your product’s intended audience and choose the marketplace that makes the most sense for a return on your investment.
- Compliance or Regulatory Issues
TikTok Shop might seem ideal for reaching a vast, new audience, but a lot of categories and items cannot legally or practically be sold on TikTok Shop. There are strict rules and tight reinforcement of TikTok Shop’s policies when it comes to prohibited products, unsupported products, invite-only products, and restricted products. What do these classes of products mean and how might they affect you?
Prohibited products, like firearms, tattoo equipment, and adult products, are not allowed at all on TikTok Shop because of local laws and regulations.
Unsupported products are entire classes of products that TikTok Shop doesn’t allow even if sellers are legally allowed to sell them locally where they live. These include medicines, alcohol, tobacco, virtual products, and services (such as travel, financial or construction).
Invite-only products are categories and product types that require sellers to be onboarded via an approvals process before listing on TikTok Shop. These include food, beverages, supplements, jewellery, watches, and live plants. If you wish to sell these products, TikTok Shop requires a process of approvals.
Restricted products are whole classes and types of products that require specific approval. Because TikTok Shop doesn’t want to be liable for issues, sellers of these products must undergo approvals and then supply relevant documentation and mandatory product attributes before listing. This can be as simple as requiring sellers to list the plug pin type (in the case of electronics) or more complicated, such as expiration dates and ingredients (in the case of cosmetics, for example).
The long list of products that fall into these categories can be a significant hurdle for sellers, especially if you are not already operating within certain compliance issues. For example, selling supplements to friends in your neighborhood is much different than selling on an online platform where you are subject to oversight from both the channel and the government. Being aware of the legal regulatory and compliance issues of your products and category can avoid a lot of hassle and expense, on TikTok and beyond.
- Lack of Creative Resources
Even if you are not in a gated category and are free to sell on TikTok Shop, does it make sense for your business forecast? It’s important to understand the content creation resources that are required for TikTok Shop and other selling channels. Content is king, but good, consistently posted content is really the key. On any platform, you’re representing your brand and business. Be sure you can do this well and give it the attention it needs to grow.
If you do not have the budget for photography, design, and video or the resources to post content at least once a day, creating a TikTok Shop might not be ideal. Likewise, if you don’t have a team with time to source trending sounds, engage with influencers, and suss out viral potential, it will be hard to gain the traction the business needs to have a significant impact on the bottom line. If you don’t know what a hashtag is or if you haven’t heard of JVKE, you have some catching up to do. A good sense check: If you do not already have an active and engaging TikTok presence for the business, TikTok Shop isn’t going to offer much return.
- Potential for Negative Exposure
The saying goes that all press is good press. But in 2024 and beyond, the very nature of “press” continues to evolve and change. TikTok is a very public platform and content spreads and evolves rapidly. Your business’ reputation is at stake, so make sure you’re ready for the exposure. A bad review or misconstrued comment, a poorly articulated response, or a user sharing negative thoughts on your business or industry are all real possibilities. To avoid this, ensure you’re retail-ready, following all regulations, and planning your content and responses carefully. Need some assistance? eCommerce can help prepare brands for TikTok Shop and manage the experience.
- Products are not Suitable
TikTok Shop operates differently than other eCommerce platforms. Rather than an actual storefront or search-based algorithm, most shopping is organically built into the platform from users’ engagement and interests. Products that are difficult to explain quickly, aren’t visually appealing, and products that are too niche, or can’t be showcased easily by influencers are all likely not a good fit for the channel. For example, it’s easy for an influencer to show off a bagel guillotine or sunset lamp in 15 seconds. It’s much harder to apply this strategy to a large appliance or expensive item and get people to checkout, for example.
- Privacy and Data Security Concerns
Privacy and data security concerns over social media channels are nothing new. But TikTok has been at the center of the most recent controversies, attracting attention from users, regulatory bodies, and cybersecurity experts. Given the geopolitical nature of these issues, and the concerns about misuse of data, some companies (such as those dealing with more sensitive customer information or marketing to minors) might want to err on the side of caution and stay off of TikTok Shop.
Moving Forward with TikTok Shop
As social commerce grows, businesses need to be aware of TikTok and TikTok Shop as a selling platform. While there are potential benefits to launching on TikTok Shop, there are also real concerns and reasons why a business or brand might want to avoid TikTok Shop. These include misaligned target audiences, regulatory and compliance concerns, lack of marketing resources, products not being suitable, potential for negative exposure, and privacy concerns. If you need help navigating TikTok Shop and selling choices in general, eCommerce Nurse is here to help. Contact us to learn more about what we offer for brands at all stages.
