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The TikTok shop attracts millions of consumers. 7 facts about who they are

The TikTok shop attracts millions of consumers. 7 facts about who they are
The TikTok shop attracts millions of consumers. 7 facts about who they are

And what does this mean for Amazon?

TikTok Shop launched in the US in September 2023. Nine months later, the platform’s social marketplace is expected to generate $17.5 billion. So who’s buying?

TikTok is great at turning creative little videos into mass-consumed art, but it’s even better at math.

Take, for example, the metrics behind the launch of TikTok Shop, which allows merchants to sell directly to TikTok users through the app. In September 2023, when the social platform launched TikTok Shop in the US, it had 150 million viewers there. Additionally, around 107 million US consumers were shopping across all social commerce sites at the time, according to eMarketer.

See the numbers? If some of those 107 million social shoppers are on TikTok, they could become TikTok Shop customers. And if they do, they could generate billions in revenue for the platform through the fees it collects from its merchants. Social commerce revenue is expected to more than double from $67 billion in 2023 to $144.5 billion by 2027, eMarketer predicts.

So who are the buyers in the TikTok Shop? In practical terms, Generation Z (12 to 27 years old) seems to be the logical target audience. According to Search Logistics, almost 45% of TikTok users belong to this age group. That’s potentially 75 million e-wallets (of Generation Z or their parents) – because in April TikTok had up to 170 million users in the US.

But here the logic of the math can be disrupted by ever-changing consumer preferences, plus the potential nationwide ban of TikTok by U.S. lawmakers if the China-based owner doesn’t sell the platform by January 2025.

Let’s break it down.

Assessing social shoppers – 7 insights

Despite fickle U.S. consumers and the legislative threat of a ban, TikTok remains optimistic about its e-commerce prospects. In 2024, the platform expects its U.S. commerce sales to grow tenfold, to $17.5 billion, Bloomberg reported (citing familiar sources).

Are all these shoppers Generation Z? No! Here’s what the latest statistics reveal.

  1. Most TikTok buyers are present – Through February, 81.3% of purchases on TikTok’s store were made by existing customers, up from 64% in November 2023, eMarketer reports. This suggests that shoppers were satisfied enough with their purchases to become repeat buyers, and repeat buyers become regular, loyal customers. This is critical for TikTok because the amount each consumer spends annually on social media shopping is expected to nearly double by 2027, from $628 in 2023 to $1,224, eMarketer predicts. TikTok’s recommendation algorithm likely influences these purchases. Could a rewards program for TikTok shoppers be next?
  2. Young adults are more likely than average TikTok buyers – Adults ages 18-24 were 3.2 times more likely to buy something from TikTok Shop than the average consumer in 2023, research from Earnest Analytics shows. Those ages 25-34 were 1.8 times more likely. As these consumers age, their app-based purchases will likely influence where retailers and brands congregate. But that influence may be starting to emerge now: Even shoppers in their 40s are more likely to buy something from TikTok Shop than the general population.
  3. TikTok shoppers are fast fashion shoppers – When it comes to clothing, cheaper items sell faster on TikTok Shop, according to further research from Earnest Analytics. In the 12-month period ending in February, 11% of TikTok Shop customers bought fast fashion, compared to 7% of the average shopper. TikTok shoppers also spent slightly more of their clothing budget at budget department stores. So it shouldn’t surprise us that budget retailers Shein and Temu share most of their customers with TikTok Shop – 28% and 25% respectively. Amazon accounts for just 12%.
  4. Nevertheless, TikTok customers will shop on Amazon Prime Day – However, according to Capital One, a quarter of daily Amazon shoppers have tried TikTok Shop Shopping research. As a result, TikTok users are likely to compare deals on TikTok Shop with those from Amazon’s annual Prime Day sales event in July. (Prime has an estimated 167 to 173 million members in the U.S.) So who are Prime Day customers? In 2023, 58% of Gen Z and 53% of Millennials shopped during the two-day sales spree that generated more than $12.9 billion in sales. Only 40% of Gen X and 37% of Baby Boomers did so.
  5. Wellness brands are successful on TikTok – By the end of 2023, more than 500,000 merchants sold to TikTok Shop users in the U.S., Bloomberg reported in April. That’s more than double the number of merchants since TikTok Shop launched. Many of these new businesses are brands that sell skin, face and body products — 81% of TikTok Shop sales in the U.S. fall into the beauty and health categories, according to Capital One research. Elf Beauty and CosRx Skincare joined TikTok Shop in 2024. TikTok could expand its offerings to U.S. consumers by giving foreign beauty brands and creators a platform to sell in the U.S. (TikTok sellers pay commissions to creators who promote their products).
  6. TikTok could create a new vacation channel for Generation Z – In TikTok Shop’s first U.S. holiday shopping season (2023), 5% of all American consumers bought gifts on the site, Capital One reports. Among those millions of shoppers: 15% of all Gen Z and 8% of Millennials. Based on TikTok Shop’s user growth, the share of U.S. consumers spending at least part of their holiday budget on TikTok Shop will be notable in 2024. Retailers, brands and independent merchants who aren’t yet testing the platform could miss out on this seasonal opportunity.
  7. Adults in the US use TikTok more often than YouTube – From 2021 to 2024, American adults increased the time they spend on TikTok from an average of 45.3 minutes to 58.4 minutes daily, research from Statista shows. The extra time comes at the expense of YouTube, where adults spent an average of 45 minutes in 2021 and 48.7 minutes in 2024. Netflix, on the other hand, has seen slow gains – 62 minutes in 2024 from 60.5 minutes in 2021. Other streaming platforms, including Amazon Prime, are likely gaining those minutes as well. Could Amazon Prime’s video ads, introduced in 2024, lead to direct purchases?

Meanwhile, the ban lurks in the TikTok shop

These seven factors are relevant when considering the elephant in TikTok Shop’s showroom: the potential ban the platform faces if it is not sold to a government-approved sponsor by January 19, 2025. In May, TikTok owner ByteDance filed a federal lawsuit against the US government to block the plan; a group of TikTok creators filed a similar suit shortly afterward.

ByteDance has promised to keep TikTok Shop running, and is even increasing some of the fees it collects from participating merchants from 2% to as much as 8%, The Information reported in January. By mid-June, the rate had ranged from 2.5% to 4.3%.

Despite the increase, TikTok apparently expects its 500,000 US sellers to stick around—some of them have filed suit to prevent the ban, after all. And TikTok expects more sellers (and buyers) to join in.

Whoever they are, they better hurry up. Tick-tock.

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This article originally appeared in Forbes.

Retail Writer at Forbes.com Jenn McMillen is nationally known as the architect of GameStop’s PowerUp Rewards and founder and chief accelerator of firea company that develops and fixes marketing, customer retention, loyalty and CRM programs. Incendio offers an agile, flexible and technology-agnostic approach without the cost structure of large agencies and is a trusted partner to some of the biggest brands in the US