TikTok ban could create opportunities for retailers

The insight: Just as TikTok Shop’s rapid rise disrupted the ecommerce landscape, so too could its sudden demise.

While some brands brace for a “doomsday” scenario following TikTok’s ban, other companies see an opportunity to win sales.

Potential winners: Amazon, Etsy-owned Depop, and Rue21 are among the retailers best positioned to benefit from a TikTok ban, according to a report by Earnest Analytics. All three retailers lost spending from customers who also used TikTok Shop, opening the door for a sales uptick once the platform goes dark in the US.

Likewise, Shein and Temu are poised to scoop up sales. Both marketplaces have considerable customer overlap with TikTok and sell the kinds of cheap, trendy items that resonate with the social commerce platform’s users.

While TikTok Shop has been the primary driver of live shopping adoption in the US, some of that spending could shift to livestreaming companies like Whatnot, which sold more than $3 billion worth of goods last year. Whatnot is already aggressively recruiting TikTok talent to sell on its platform and recently raised $265 million at a nearly $5 billion valuation to expand into new categories and markets.

Others brace for impact: Unsurprisingly, the brands most concerned for their future are those that depend heavily on TikTok to reach shoppers and drive sales.

• Aliyah Arnold, founder of indie beauty brand BossUp Cosmetics, told Women’s Wear Daily that a ban would “impact not just the brand, but the livelihood of everyone who’s poured their heart into making BossUp Cosmetics what it is today.”
• TikTok Shop seller Michael Herling told Business Insider that a ban “essentially shuts my business down,” although he has contingency plans to advertise his business on Facebook and Instagram.

Our take: TikTok Shop’s demise will create a host of opportunities for players across the retail landscape—from social media platforms like Meta, YouTube, and Pinterest that could benefit from shoppers’ newfound interest in social commerce to retailers like Amazon and Shein that are already popular with TikTok users.

Go further: Read our FAQ on the US TikTok Ban.

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