Gen Z adults show growing comfort with purchasing products on TikTok, according to a report by Insider Intelligence, but TikTok’s path to becoming a successful shopping platform faces hurdles.
Insider Intelligence’s report reveals that Gen Z adults are increasingly using social media platforms like TikTok and Instagram for making purchases. However, while TikTok’s ambitions to become a thriving marketplace are evident, challenges have hindered its progress thus far.
Gen Z’s Preferred Shopping Platforms: The survey conducted by Jungle Scout found that Instagram is the top choice for Gen Z adults when it comes to making purchases on social networks, with 71% using the platform. YouTube and TikTok tie at 68%, followed by Facebook (62%) and Snapchat (55%).
TikTok as a Search Engine Substitute: Interestingly, the report highlights that TikTok is being utilized by Gen Z adults (43%) as a product search tool more often than traditional search engines like Google or Bing (38%). Recognizing this trend, TikTok has begun testing search ads, capitalizing on its growing role as a search engine alternative.
TikTok’s Pursuit of E-commerce: TikTok has been actively introducing features to transform its platform into a shopping-centric environment. Notably, it rolled out “Shop” in the UK and Indonesia in 2021, allowing users to place orders directly through livestreams. However, the company encountered obstacles along the way.
Challenges and Roadblocks: TikTok faced hurdles in expanding its live e-commerce initiative in Europe and the US due to a lack of user interest, according to reports. Despite testing Shop in the US since November, TikTok has struggled to attract sellers onto the platform, with less than 100 merchants directly selling on TikTok Shop as of March.
Live-Streaming Difficulties in the US: Compared to China, where live-shopping has seen immense success, US audiences have shown limited enthusiasm for this format. A Morning Consult survey revealed that over 80% of US adults did not participate in shoppable livestreams in 2022, suggesting challenges for TikTok Shop’s growth in the US.
Insider Intelligence’s Perspective: Insider Intelligence concludes in its report that while TikTok is essential for brands and retailers targeting Gen Z, TikTok Shop may not be a worthwhile investment for most merchants at present. They suggest that it is a “nice-to-have” rather than a “need-to-have” for businesses.
Visual Search Function Testing: In unrelated news, TikTok Shop is reportedly testing a visual search function outside of the US. This feature would enable users to take photos and search TikTok’s shopping inventory based on the image, potentially enhancing the platform’s shopping experience.
While Gen Z’s comfort with shopping on TikTok is evident, TikTok’s journey towards becoming a successful shopping platform faces obstacles such as low seller participation and limited interest in live-shopping among US audiences. As TikTok continues to refine its e-commerce offerings, it remains a vital platform for brands targeting Gen Z consumers.
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