TikTok may be the world’s No. 1 app in 2023 by downloads and consumer spending, but it’s not at the top of the list by actual usage. Last year, Facebook once again retained its No. 1 spot for monthly active users, followed by Meta’s other apps WhatsApp, Instagram and Messenger, all of which were ahead of fifth-ranked TikTok. Now new data suggests TikTok has outgrown TikTok. The slowdown has begun, raising the question of whether the app’s foray into e-commerce via TikTok Shop is to blame.
The latest data from market intelligence company Sensor Tower shows that although TikTok’s growth is still positive, it is slowing down. In 2022, TikTok’s monthly active users will increase by an average of 12% per quarter, but this number will decrease to 3% per quarter in 2023.
The change comes after TikTok launched TikTok Shop in the U.S.
The video app began testing Shop in the United States in November 2022, and the scope of the test was expanded early last year as more and more brands joined, including PacSun, Revolve, Willow Boutique, and beauty brand KimChi Chic. While the store won’t “officially” launch in the U.S. until September 2023, it’s just one of several efforts to translate the power of TikTok videos (essentially the whole “TikTok made me buy it” meme) into real-world sales one.
Last summer, for example, TikTok experimented with an in-app shopping section in the UK called “Trendy Beat,” which offered products sold by TikTok parent company ByteDance. TikTok also offers an affiliate program that allows creators to earn commissions from products, according to The Associated Press and other media reports.
But as Business Insider noted in November, sellers’ embrace of the shopping platform has begun to spark complaints, with some lamenting that TikTok Shop is turning the app into an “ad-filled wasteland” and a “dystopia.” space. Elsewhere around the web, Reddit users have been debating whether TikTok Shop has “ruined” the app, which is now filled with “people dropshipping/selling cheap products,” as one Reddit user put it.
“Personally, I started getting really annoyed with almost all my other videos. [For You Page] Someone is exaggerating a product in the store feature in an attempt to make it go viral and make a huge commission,” Reddit user u/megg-salad-sammich wrote in September. “This is a new way for creators to make money, which is great, but I find myself scrolling less and less because I know almost every video is just trying to get me to buy something random,” they said.
A search on Reddit revealed more posts throughout the last year complaining about the same thing—that TikTok was now “annoying” because of TikTok Shop, and that seeing ads every few videos was a frustrating experience.
While TikTok users are adapting to their favorite social network becoming an online mall, TikTok’s Shop Seller app, which powers its e-commerce initiatives, has grown.
Sensor Tower data shows that Shop Seller’s growth has been “robust” since the fourth quarter of 2022, with year-on-year growth of 230% as of the fourth quarter of 2023. However, the app accounts for only a small portion of TikTok’s active user base—currently 1.4 billion as of the first quarter of this year. Meanwhile, Shop Seller has only about 6 million monthly active users, the company reported.
Instagram may end up benefiting from user dissatisfaction with TikTok Shop, as the Meta-owned app removed its own store tab last January and canceled on-site shopping in March. This may make it more palatable to those who want to avoid a more direct call to people to shop within the app.
Meta’s move was triggered by broader industry trends, which doesn’t seem to bode well for the future of TikTok Shop. Live streaming shopping has boomed during the epidemic, and e-commerce sales have surged. But when things return to normal, social commerce (including live shopping) will only account for about 5% of total U.S. e-commerce sales as of 2022. This seems to indicate that U.S. consumers may not be ready to shop directly from movies, although they are clearly still influenced by online trends.
However, users are yet to become dissatisfied with TikTok Shop and abandon the app in favor of Instagram Reels.
Sensor Tower found that Instagram’s monthly active user growth has been relatively stable in the “mid-single digits” and has not been significantly negatively or positively impacted since the launch of the TikTok Shop Seller app.
Data from another company, Appfigures, also supports this conclusion, but adds that while TikTok’s revenue has been growing, its downloads have stagnated or declined more than they have grown — a trend that has continued for more than a year. Includes global and other regions.USA
Image Source: Application characters
Image Source: Application characters
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