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Brands Flock to TikTok Shop Amid Platform Headwinds

Brands are still betting on the social media platform’s commerce opportunity amid rising seller fees, slowing user growth and a potential U.S. ban.
rare tiktok shop

Selena Gomez’s Rare Beauty is the latest brand to occupy prime promotional space on TikTok Shop through its “Super Brand Day” feature. 

TikTok Shop enables brands and retailers to showcase and sell products on the platform, as well as manage things like shipping, fulfillment and point of purchase. Its Super Brand Day showcase (which typically runs for multiple days despite the name) gives sellers the top ad spot under the “Shop” tab, which links to a dedicated brand page spotlighting products available on the marketplace, particularly elevating a new launch, and deals. 

Rare Beauty’s Super Brand Day showcase runs April 4-7. It’s particularly spotlighting the brand’s new soft pinch powder blush alongside a purchase incentive offering a free gift with any Rare order over $50. It’s also running daily livestreams that dangle access to exclusive giveaways. 

Before Rare, E.l.f. Cosmetics said in a media release that it would be the first brand featured in a TikTok Shop Super Brand Day, with its showcase running March 31-April 3.

E.l.f said this activation marked its 20th year in business and its one-year anniversary as a “top TikTok Shop'' seller. It also used the opportunity to debut its new power grip dewy setting spray, which the brand wrote an original song for the launch on TikTok Shop. The lyrics — set to a hip-hop beat — broke down how to use this new “holy grail product,” as E.l.f. describes it. 

“Being the first brand partner in a TikTok Shop Super Brand Day unites an unique trifecta: introducing a new product, debuting an original song, and shining a spotlight on our shop," Kory Marchisotto, chief marketing officer of E.l.f., said in the release. "We wanted to surprise and delight our community who have been with us since our first viral moment on TikTok. It was important for us to make a bold entrance and show up in a disruptive way to this party, and what better way than a new product and another original song for the platform.”

Also last month, Chi Haircare launched its own TikTok Shop featuring a curated selection of “best-selling” products. By establishing its presence on TikTok Shop, the brand says it is leveraging its expertise in haircare to offer personalized recommendations, exclusive deals and engaging content to its growing community,

Prior to that, Coca-Cola took to TikTok Shop to launch its first product exclusively sold on the platform, dubbed Happy Tears Zero Sugar

While the app remains wildly popular among consumers and brands continue to flock to the commerce opportunity, the social platform is still facing headwinds and making changes related to sellers. 

Increasing concerns and hardening views from American lawmakers regarding the app, which is owned by the China-based ByteDance, and possible national security threats it poses make its future in the U.S. uncertain. 

Increased competition from Instagram Reels and similar video-sharing feeds from Facebook and Snapchat may be contributing to a slowdown in downloads, as well as India's ban of the app in 2020. However, TikTok is still one of the fastest growing in the world. It passed one billion users in 2021 and is expected to surpass 1.8 billion by the end of 2024, according to a TikTok report from the Business of Apps platform.

Additionally, TikTok recently announced that it is raising costs for sellers in increments. On April 1, the referral fee (i.e., all service fees aside from shipping and taxes) on all qualified transactions rose from 2% to 6% per order. Starting July 1, the fee will increase to 8%.  

In 2023, TikTok generated an estimated $14.3 billion revenue in 2023, a 52% increase year-on-year, according to Business of Apps. The rising costs are likely to continue its upward trend in revenue. 

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