TikTok tests new ways to embed commerce into the in-app experience

The news: TikTok is testing a feature that uses AI to identify products in videos and suggest similar items for sale on its ecommerce marketplace, per Insider.

• Unlike similar capabilities rolled out as part of TikTok’s affiliate program, creators whose videos are included in the test don’t receive commissions on any resulting sales, nor are they notified of the feature’s presence on their content.
• The test is currently limited to a small group of users in the US and UK.

Zoom in: The addition of product recommendations to non-shopping content is TikTok’s latest attempt to fully embed commerce into the in-app experience.

• Given the platform’s increasingly important role in product discovery and trend-setting, making more content shoppable gives TikTok more opportunities to inspire users to make a purchase.
• That’s especially key given that the primary driver of social commerce growth is higher spending from existing social buyers, rather than more people shopping on social platforms. We expect average annual social commerce sales per buyer to grow 21.3% this year to $628; by 2026, buyers will spend over $1,000 on average per year.

The big picture: TikTok is pouring resources into TikTok Shop as it attempts to build out an end-to-end ecommerce infrastructure that would enable it to properly compete with retail rivals.

• But it’s currently experiencing growing pains, including a counterfeit problem that could deter users from fully engaging with the feature as well as keep reputable merchants from signing on.
• Even so, we expect the number of buyers on TikTok to surge by 49.4% this year, helped by strong social commerce adoption among Gen Z consumers.

Go further: For more on TikTok Shop, check out our 2023 Social Commerce Forecast.