TikTok has become a powerhouse in the world of social commerce, and it is projected to generate $20 billion in merchandise sales through its platform this year. While the majority of these sales come from Southeast Asian markets, TikTok is now looking to replicate its success in the US market. One trend that is capturing the attention of TikTok users in the US is the emergence of livestream videos featuring creators acting as non-playable characters (NPCs), a phenomenon previously seen in video games. These livestreams, where creators interact with viewers and receive virtual gifts, are gaining popularity and presenting a significant opportunity for TikTok to further develop its livestream commerce operation.
Crystal Alana Bennett, a content creator on TikTok, has embraced the NPC role and can earn up to $700 per hour from viewer gifts. This unique form of entertainment, reminiscent of sketch comedy shows like "SNL" or "In Living Color," captivates TikTok viewers who appreciate the constant laughter and interaction with creators. This growing trend is making livestreams a focal point on TikTok and attracting more users to go live.
Livestream commerce has been a challenging market to crack in the US, with competitors like Instagram, YouTube, and Amazon struggling to achieve widespread success. TikTok initially experimented with livestream commerce in the UK, but the results were less than satisfactory. However, with its dominance in social commerce, TikTok is determined to make livestream commerce a reality in the US.
TikTok's commerce operation, known internally as "community commerce," aims to seamlessly integrate shopping into the app's various interest-based communities. These communities, such as BookTok or the private chefs of TikTok, have established their own unique identities and dedicated fan bases. By incorporating product tags and the ability to make purchases within videos, TikTok hopes to create a full marketplace where users can add products from multiple merchants to their carts and complete their transactions entirely within the app.
While TikTok already has a strong foothold in influencing consumer trends with viral videos, merging shopping and livestream video in the US market won't be without its challenges. The company faces ongoing scrutiny from the US government due to its Chinese ownership, with potential bans looming. Additionally, TikTok must convince popular livestream creators to embrace selling products and engage their followers in commerce.
Despite these hurdles, TikTok is well-positioned to leverage its current success and tap into the potential of livestream commerce. If it can replicate the attention and usage that existing viral videos have generated, TikTok has the opportunity to revolutionize the livestream commerce landscape in the US and establish itself as a dominant player in the industry.