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Hello hello! It’s Dan Frommer, back with The New Consumer. Did you pre-order the Apple Vision Pro? I’m holding off, pending a live demo. But as someone who’s easily spent 25,000 hours in front of a Mac, and studies interfaces and how they drive creativity and consumption, I’m very curious.
What does a Shark Tank appearance do for a small food company’s sales? On the show earlier this month, Fishwife CEO Becca Millstein led off and was a total star pitching her tinned seafood startup, including a brilliant counter-offer that led to a deal. If you have access, her segment is worth watching — the whole episode is on Hulu. Sales-spike details below!
First, an expanded look into TikTok Shop, via my latest Consumer Trends report with Coefficient Capital, including updated data and charts.
One of the more genius, slightly unhinged features of TikTok Shop, the newish e-commerce marketplace built into TikTok, is that you can see — right there — how many people have purchased each product.
Some of the numbers are wild: TikTok Shop users have already purchased more than 757,000 units of the Unbrush Detangling Hair Brush; more than 635,000 pieces of shapewear from a “brand” called NcmRyu; and more than 165,000 sets of the MySmile original teeth whitening kit.
The idea here — and the bigger idea behind TikTok Shop — is that sales can go viral the same way TikTok’s videos are known to. Success is in the stat counter, for everyone to see.
We’ve known for a while that young consumers discover brands and products through TikTok — now we know they’re willing to shop and spend there, too. This integrated funnel — audience, talent, videos, feed, storefront, payments — has proven to be effective, at least so far.
For the first 20 years of the social media era, it seemed like social commerce — the idea that people would buy things they saw on social media, through social media — was one of tech’s great whiffs, at least in the US.
Facebook, still the world’s largest social network, drives many billions of dollars in e-commerce sales for other merchants, through its advertising business and organic links. Facebook Marketplace, its somewhat less sketchy version of Craigslist, is vibrant. But it hasn’t built a meaningful commerce business.
Over more than a decade of experiments at Instagram and Facebook, plus Twitter and others, despite high hopes, social commerce just didn’t click. And e-commerce merchants never got their own social networks to even come close to working.
Until last year, that is, when TikTok launched TikTok Shop in the US, featuring thousands of products for sale across a variety of categories, from makeup and clothing to food and electronics. After months of testing, TikTok Shop debuted broadly in September. It’s been a huge hit right away.
In November, people spent an estimated $363 million on TikTok Shop in the US, according to data firm YipitData, up from $260 million in October. If that’s close, that puts it on a ~$4 billion annual gross merchandise value run rate just months after launch — impressive.
(In our latest Consumer Trends Survey, among the nearly 1,200 people who said they used TikTok at least once per month, already 64% said they were aware of TikTok Shop, 69% said they were willing to buy something from TikTok, and 28% said they had already made a purchase.)
Here’s another view via Earnest Analytics, which tracks US credit and debit card spending. TikTok Shop is already big enough that it’s drawing serious spending among consumers who shop at Shein, the fast-fashion e-commerce giant.
The more macro story here is that the super-cheap-e-commerce-from-China pie is growing quickly: If you build a basket of these three merchants — Shein, TikTok Shop, and Temu, which has also grown dramatically over the past year — Shein customers are spending about twice as much with them in total as they did a year ago.
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Hi, I’m Dan Frommer and this is The New Consumer, a publication about how and why people spend their time and money.
I’m a longtime tech and business journalist, and I’m excited to focus my attention on how technology continues to profoundly change how things are created, experienced, bought, and sold. The New Consumer is supported by your membership — join now to receive my reporting, analysis, and commentary directly in your inbox, via my member-exclusive newsletter. Thanks in advance.
