With the launch of TikTok Shop in the US, the famous short-form video platform TikTok is making a big move into e-commerce after a successful start in the UK. People in the US who use the site can now buy things right in the TikTok app.
The move could change the way e-commerce works not only in the US but also in places like Nigeria, where online shopping and digital trade are growing.
With the online marketplace built into the TikTok app, users can buy things from videos posted by brands and creators. When people look for goods or watch videos, a “Shop” tab and a “Shop” button in the videos make it easy for them to find related items.
Along with the marketplace, TikTok is launching a new affiliate programme to let creators get commissions on goods they sell in videos and live streams without making deals outside of TikTok. The programme aims to encourage artists to do more e-commerce, which could lead to more product endorsements.
In addition to this, TikTok now has its fulfilment centres so that it can store and ship goods itself, just like Amazon.
The move backs up a report from last week, which said that users saw a new “Shop” tab in the app, which could mean the launch is coming soon. Reports have been going around for weeks that TikTok will soon launch its new online store to compete with Amazon in the US.
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How TikTok could affect online shopping in Nigeria
A report says that Nigeria’s social commerce business will grow by 46.0% each year until 2023 when it will be worth US$1156.1 million. Between 2022 and 2028, the industry is projected to grow at a compound annual growth rate (CAGR) of 27.2%. So, the country’s GMV from social commerce is projected to grow from $1,561.1 million in 2023 to $4,889.2 million in 2028.
Social media sites like Facebook, WhatsApp, Twitter, Instagram, and TikTok are already showing themselves to be valuable ways for companies and businesses of all sizes in Nigeria to connect with their target audience and increase sales. It is now an essential part of their business plans, and many companies spend a lot of money on social media campaigns to reach more people.
Even though TikTok Shop is starting in the US and UK, it could affect social commerce and e-commerce in Nigeria and other parts of Africa. Statistics show that 47.7% of Nigeria’s 34 million social media users use TikTok. Young people and adults in Nigeria use the app as their primary social media tool.
With the possibility that its online marketplace will open soon in Nigeria, its platform could even get more people to look at goods and buy them through the app because it is interactive and visually attractive. This could make Nigerians more interested and cause them to shop more online.
Its partner programme, which would encourage Nigerian content creators to promote e-commerce, could also be another way for content creators on the app to make money, just like Twitter.
Even though this could be good for online shopping and companies, the launch of TikTok Shop could threaten Nigerian e-commerce platforms like Jumia and Jiji. There is already a lot of competition between social and e-commerce businesses, so e-commerce platforms may need to develop new ideas and improve their services to keep up.