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TIKTOK: on its way to become a marketplace

 From a social platform dedicated to creative content to a shopping destination.


Every other Wednesday, h/commerce provides in-depth analysis of the most impactful trends reshaping retail.

This past year, ecommerce has known a true acceleration. Brick & mortar developed their e-commerce platforms, pure players improved their own model, and many other retailers adopted various digital functionalities to ensure service continuity.

In this respect, social platforms were brands’ best allies. They provide livestreaming services, shopping functionalities and so on.

Today, social media are implementing new functionalities within their apps to enable users to make their shopping directly from them.

For example, Instagram recently launched its shopping feature into IGTV and Reels and Pinterest added a specific shopping tab in its search results pages.

TikTok case is particularly impressive. According to Forbes, TikTok was the most downloaded app of 2020 with an 850 million downloads. The pandemic has been a kickstarter for the social platform which is progressively transforming itself from a content creation platform to an interactive online marketplace.

The path toward marketplace

This move toward ecommerce follows the shift made by social media leaders Facebook and Instagram.

To better understand the path being taken by TikTok to become a whole ecommerce ecosystem, we should first take a look at a similar social platform model: Douyin.

Douyin, a model to follow

Douyin is the Chinese version of TikTok both owned by Beijing-based ByteDance.

Last year, the platform collaborated with Shopify to offer retailers the possibility to sell their goods on the social platform.

More recently, Douyin added a new significant functionality on its app which is in-app online shopping. Thanks to its various features, the app transformed itself from a short video creation service into an online marketplace. For instance, when users are scrolling through a livestreaming, a floating window featuring products appears so users can purchase what they want without having to leave the livestream. Then, on some influencers’ or brands’ pages, in-app stores are available, and users can fill their virtual cart and pay directly from the app. In addition, users can get help via messaging a customer support that became available on the app.

This shift toward ecommerce seems quite successful for the app which has reached a $26 billions of e-commerce transactions in its first year of operation in 2020.

In January, Douyin even launched a payment service called ‘Douyin Pay’ to enhance customer journey on the social platform. The platform clearly tries to handle as many steps of a transaction as possible. This new service also comes as a way to compete with the two leaders in China Alipay and Wechat Pay, handling both 90% of payments in China.

Credits: Luxury Society Credits WalktheChat

TikTok case, an emerging leader

Apparently, TikTok is progressively implementing similar features into its own app.

So far, TikTok has been seen as a strong marketing tool for brands. In 2020, the app signed a partnership with Shopify to enable retailers to advertise and sell their products on the platform. Retailers can connect to a TikTok For Business account and release videos featuring ‘shoppable ads’. Brands also use TikTok to place sponsored influencers’ content. Through short videos or livrestreams, users have access to numerous e-stores’ links.

Credits: TikTok

The app is currently testing a new service providing retailers the possibility to sell their items directly to users through the app. TikTok initiated this partnership with some European brands. Hype, a British streetwear brand is apparently one of the first to test out the new functionality. Partnering brands would be able to manage a dedicated store into the TikTok system. More precisely, the functionality allows retailers to display a range of items with images and prices on a TikTok storefront page.

The date for a broader launch hasn’t been communicated yet. If TikTok follows Douyin’s ambition, it would develop a strong marketplace offering, a customer assistance and a built-in payment function.

Why is it interesting?

As many other social platforms TikTok is slowly turning into an online shopping destination.

Social media platforms became intermediaries connecting brands with communities. Consumption behaviors and trends are also emerging from these platforms that are today sources of inspiration for retailers.

These efforts are building closed loop e-commerce businesses. Social platforms broke the barriers between discovery and purchase along the consumer journey. Indeed, from inspiration provided by contents, to purchase ability offered by payment solutions and functionalities, everything consumers need is now implemented in a single platform. Besides creating engagement and awareness through contents and influence, brands can now facilitate the purchase journey.

Every social media platform is taking a closer look at the marketplace model to capture the attention of younger generations.


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Mikaela Barbosa

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