How small businesses are revolutionizing ecommerce on TikTok

With over 5 million small businesses creating and selling through the platform every day, TikTok is the place for small businesses to express their authentic self, find their community, make real connections and be discovered.(1) But, just what is it that makes TikTok the place for small businesses to grow?

The social commerce gap

Ecommerce via social media platforms and digital storefronts—"social commerce"—is well-entrenched globally. There are countless complex, expensive and time-consuming social commerce solutions available but as more and more marketers are finding, it's becoming harder to get results. The problem isn't that modern solutions, products and platforms aren't useful. They simply are not evolving fast enough to resonate with modern shoppers.

How are today's businesses responding to this disruption? They're signing up for TikTok Ads Manager.

The industry is shifting away from social commerce and towards something called "community commerce." Businesses still need to be at the right place at the right time, but they can't rely entirely on marketing messages. Consumers do their research before they buy. They read reviews—and watch reviews—placing more weight on the experiences of other consumers, not just celebrities and influencers. TikTok as a platform is uniquely suited to help business owners and marketers capitalize on this emerging industry shift.

TikTok is changing the face of ecommerce

TikTok is first and foremost an entertainment platform. Users open the app to be entertained by genuine, unfiltered and trendsetting content, and TikTok's "For You Page" serves users with new content they might like based on their own interactions within the app.

Savvy marketers might notice that this is simply another version of retargeting—the cornerstone of traditional digital marketing—but the difference comes down to speed; 66% of purchase journeys that include TikTok see a research activity within 5 minutes of platform use.(2) Businesses are investing in TikTok because of how effective the platform is at drawing people in, encouraging action and inspiring brand advocacy. 37% of TikTok users who discover something on TikTok buy it immediately, and TikTok users are 1.5x more likely to make a purchase on TikTok than the competitive average.(3)

Other platforms may have targeting capabilities, but TikTok is specifically designed around it. TikTok is uniquely adept at targeting niche interests in a deeper, more satisfying way—which explains why TikTok users spend 14% more when TikTok is a part of the purchase journey.(3)

TikTok fuels joyful discovery

The desire to reach new audiences and achieve more consistent results at a lower cost is what made TikTok so intriguing to HighPeak Co. After sporadic success from their organic TikTok presence, HighPeak Co. strategically added paid efforts to amplify their reach and optimize their success that resulted in over 53,000 video views and 1,200 complete payments with a 58% increase month over month.

When TikTok users discover content they like, they engage with it. And if a business creates engaging content that introduces their products in a relevant, entertaining way, those businesses tend to get more results. Advertising on TikTok is a highly efficient investment for small businesses with limited time and resources because the platform has all the tools and resources to help make content creation easy. Together with TikTok's inherent targeting capabilities, the content businesses create on TikTok is more likely to be found by an audience that's already eager to view it.

TikTok inspires deeper interactions, consideration and impact

Social commerce demands action. Community commerce inspires interaction. The "community" aspect is why TikTok is so appealing as an entertainment platform and so effective as a place for businesses to grow. It is designed not solely around consumption, but participation. Users come to be entertained, but also to create and interact with their friends and other users around the world.

What matters most here is authenticity, and it's why so many businesses partner with content creators as part of their growth strategy. Take BlendJet, one of the many small businesses that has seen amazing success through advertising on TikTok. BlendJet partnered with creators in the lifestyle, fitness and foodie communities and promoted their organic content through Spark Ads. The campaign reached more than 28 million impressions—impressive in its own right—but also generated 12,000 conversions. Why?

On TikTok, engagement is a two-way street. 92% of TikTok users take some action following the content they see and for BlendJet, strong creator partnerships put their products in front of millions of new viewers who already had a general interest in products like theirs.(4) But the creators—with audiences whose trust they have already earned—were able to quickly accelerate 12,000 users from discovery to consideration, and eventually to purchase. Together, creators and businesses become the perfect duo to create enormous impact.

TikTok creates an infinite ecommerce loop

Combined with the speed at which TikTok serves new and relevant content inspiring action and purchase, businesses can collapse the traditional marketing funnel. Or, more precisely, they replace the funnel with a loop that is constantly generating new interactions, new sales and even new content for your business. This is #TikTokMadeMeBuyIt—word-of-mouth marketing taken to the next level—and it's why so many brands and businesses invest in advertising on TikTok.

Colombiana Boutique truly stands out in this regard; this women-owned fashion brand turned a single $500 ad campaign into 135 add-to-cart sessions. Their work through this paid strategy with a content creator ended up going viral, amassing millions of views organically.

Clearly, creator partnerships are a vital tool for businesses looking to break through; 43% of users agree that they trust the recommendations of TikTok creators.(5) But, the reason why is that when viewers feel free, able and inspired to participate, they are more likely to create new content advocating for brands they like and identify with. A thoughtful, entertaining TikTok campaign can continue to generate new content that reaches more and more people.

From #TikTokMadeMeBuyIt to the future of ecommerce

TikTok will continue to play a pivotal role for businesses to reach new customers. 1 in 3 users have bought a product because they saw it on TikTok in the past year, and it's not hard to see why.(3) Product storytelling is moving beyond transaction. TikTok makes it easier to discover new things and helps businesses tell more effective, impactful stories more affordably.

The best way for small business owners to get started is to create a TikTok for Business account and sign up for TikTok Ads Manager. There are no upfront costs to join, and new users can explore the features available to them—from the easy-to-use video editor to the robust onboard ad measurement capabilities—until they're ready to grow with TikTok.

Not a bad way to start Small Business Month!

Now is the perfect time to start

If you're a small business owner who's curious about the best way to leverage TikTok for your business, then you have excellent timing! As part of their Small Business Month celebrations, TikTok is hosting a series of live webinar events to help owners and advertisers learn the ins and outs of growing their business with TikTok. Register here for the TikTok Takeoff webinar series and explore how else you can celebrate Small Business Month with TikTok.

Sources:

(1) TikTok Newsroom, "Celebrating our thriving community of 150 million Americans." March 2023.

(2) TikTok Marketing Science, "US Path-to-Purchase Research," conducted by Luth. 2021.

(3) TikTok Marketing Science, "Global Retail Path to Purchase Study," conducted by Material. August 2021.

(4) TikTok Marketing Science, "US Time Well Spent Research 2021," conducted by Kantar. March 2021.

(5) TikTok Marketing Science US Creator Ads: Elements of Attention Study conducted by Lumen. June 2022. (n=1,650). Remote neuro methodology using a mock TikTok feed.