Jump to
TikTok has big ambitions for shopping and has been investing heavily in it — from developing a logistics business to powering in-app purchases through TikTok Shop.
The feature is available in seven regions in Asia, and has been in the UK since 2021. It’s also launched in beta in the US, and US-based merchants were offered discounts to try out the product in April.
To better understand how TikTok is thinking about Shop, Insider spoke with Patrick Nommensen, general manager of UK ecommerce at TikTok. Nommensen joined ByteDance through the acquisition of Musical.ly in 2017, and has held a number of senior roles in the business including across product strategy, public affairs, and now ecommerce.
Overseeing TikTok Shop has been one of Nommensen’s focuses.
Nommensen said the feature had seen success with small and mid-sized merchants and that his team had been working in recent months to onboard larger brands like L’Oréal. He said he sees livestreaming as a growing avenue to drive sales, despite the varying degrees of success the model has had outside of Asia.
Nommensen contended that the community and discovery aspects of TikTok — think: #TikTokMadeMeBuyIt — are a unique selling points for brands, and something that “other ecommerce platforms aren’t necessarily able to offer.”
TikTok Shop has been around in the UK for about two years, but Nommensen said the product launched when it was still at “an incredibly early stage,” and that the company had been “seriously operating and growing the business for the past year.”
Generally, small businesses have been quicker at experimenting and finding success with the feature, though some large corporations, like L’Oréal and UK online beauty retailer LookFantastic, have also been onboarded in the past six months.
“We now have solutions designed with complex businesses in mind,” Nommensen said. “For example, API solutions that allow a complex business to integrate TikTok Shop into tools they may be using internally to process orders, refunds, customer support, warehousing, and so forth.”
To help with onboarding, TikTok has dedicated industry teams that focus on supporting merchants, from pitching and introduction, to best practices, to account management.
Nommensen said the sale categories that are finding the most success are beauty and fashion, with others gaining ground, like home and living, electronics, jewelry, and collectibles.
TikTok currently takes a 5% commission from merchants — the same as Instagram’s selling fee and lower than Amazon’s typical 8% to 15% commission rate. Nommensen said the rate will be “evaluated from time to time.”
TikTok’s global shopping roll-out has had its ups and downs. The Information reported in April that the feature was struggling to attract merchants. And plans to expand further in the US and in other countries like Spain and Brazil came to a halt in May, The Wall Street Journal and the FT reported.
Nommensen said that while TikTok is a “global platform” with “a global ambition,” the company decided to spend more energy on serving existing markets.
“This is a new way of connecting with customers, it’s a new way of selling, so spending some more time in the UK, and really going bigger and figuring out the ins and outs, enabling big groups to build a team around this before scaling out into other markets makes a lot of business sense for our merchants,” he said.
Nommensen said the plan for expansion in the US was “completely on track.”
TikTok creators are eligible to earn commission through an affiliate model when they sell a brand’s product.
Merchants can opt for three plans: the “Shop” plan, with the same commission rate for all products; the “Open” plan, with select products and varying commission rates; and the “Targeted” plan, which allows merchants to choose the creators they want to partner with.
Sellers set their own commission fee. Deciding on a commission percentage can be tricky, but Nommensen said benchmarking against popular affiliate platforms like Amazon or LTK can be helpful.
“It really depends on the category,” he said. “Some categories from the merchant’s point of view are higher margin, as opposed to selling electronics, for example. Obviously the rates are going to differ.” For a beauty brand, he usually suggests a rate between 10% to 20%.
Nommensen said TikTok has been working with some high-tier creators and celebrities on a strategic basis to spread awareness around TikTok Shop, pairing them with merchants.
When it comes to the broader creator ecosystem, TikTok tends to work more with agencies than by communicating directly with creators, he said. Nommensen cited Grail, a talent and marketing agency, as a major UK partner.
“We have a team that focuses on helping creator agencies to get an understanding about TikTok Shop and best practices, so that they can enable the creators that they manage to onboard onto TikTok Shop, start working with merchants, and ultimately drive revenue,” he said.
For a few years now, many tech and retail insiders have predicted that livestream shopping would take hold in Western countries the same way it has in Southeast Asia and China, where it generated $300 billion in 2021.
Platforms like Facebook and Amazon have tested out live shopping features with varying degrees of success.
But while social commerce is on the rise in the US — with TikTok being a growing platform for users to shop — there’s still hesitancy toward livestream shopping, data from Insider Intelligence shows.
Nommensen is bullish on livestreaming and said TikTok is seeing positive responses from brands.
“With livestreaming they can have a personal interaction, almost like a back-and-forth discussion,” he said. “From a customer engagement and loyalty point of view, it’s been a really powerful mechanism.”
While short-form video is still the primary driver of TikTok ecommerce, Nommensen said he believed over time that will change to favor livestreaming.
Read next
Read next