TikTok Ventures into E-commerce Space by Teaming Up With Shopify (SHOP.NYSE)

TikTok Makes Moves in Social Commerce With Shopify Integration

From the outset, social media has provided an indispensable resource for businesses looking to boost their sales both online and in-store.

These platforms make it easy for marketers to reach audiences through targeted advertising. This marriage between e-commerce marketing and social media is responsible for the latest partnership between two giant Internet companies.

Canadian e-commerce platform Shopify (SHOP.NYSE) is partnering with ByteDance’s video-based social network TikTok. The collaboration is meant to help Shopify’s merchants increase their customer base by providing easy access to TikTok’s younger audience.

How the Shopify-TikTok Platform Works

For merchants looking to drive sales, or a TikTok user interested in making a purchase – the integrated Shopify/TikTok platform works effectively.

Merchants will be able to create and run TikTok campaigns directly from their Shopify accounts. So how does this work? Simply install the new TikTok channel app, available on Shopify App Store.

Once you install, you’ll be able to view all the core functions you need to run your campaign. More specifically, you’ll find tools that let you generate shareable content. This content is what will convert your products into In-Feed video ads, which will be viewed by the TikTok community.

The best part about this system is that it allows merchants to create a custom audience. You can decide which TikTok users view your ads by specifying the age, gender, user behavior, and video category. You can also monitor the progress of your campaign.

TikTok users, on their part, will be able to make quick purchases by clicking on the “shoppable” video ads. Once they click on an ad, they’ll be directed to Shopify’s website to complete the transaction.

Key Benefits

The greatest benefit of this partnership deal is that it will help Shopify’s merchants reach more customers.

Presently, TikTok has over 800 million users globally. It means that Shopify merchants will be able to advertise their products to a much bigger audience.

This partnership deal couldn’t have happened at a more convenient time, as the festive season is just around the corner.

When making the announcement about the deal, Satish Kanwar, vice president (VP) of Product at Shopify said, “We’re thrilled to be the first partner to welcome TikTok to the world of commerce, particularly right now, as our merchants prepare for a busy online holiday shopping season”.

Blake Chandlee, the VP of Global Business Solutions at TikTok echoed the same saying, “Shopify is the ultimate partner to help us grow and expand our commerce capabilities globally”.

Another overlooked benefit resulting from this collaboration is the insight that merchants will gain. Though we aren’t sure of how much buying power TikTok users hold, one thing is evident: Shopify merchants will learn a great deal about their customers’online habits. Based on what they learn, the traders can then tweak their TikTok campaigns so as to drive even more sales.

Availability And The $300 Incentive

How well will the integrated software be received by merchants? Well, Shopify has found the perfect incentive to sweeten the deal for merchants. The retail giant is offering a $300 ad credit to jumpstart your TikTok campaign through the new channel.

In terms of accessibility, the software is currently available in the US. However, the two companies are planning to launch the channel in other markets as well, namely, North America, Europe, and Southeast Asia.

Potential Issues

Perhaps the only issue lingering in most people’s minds entails Walmart’s (WMT.NYSE) initial plan to acquire TikTok. Not so long ago, Walmart held talks with Microsoft to try and negotiate a purchase deal for the sensational media app.

If this deal goes through, Walmart is set to take over the global version of the app. It means that TikTok would no longer be owned by ByteDance. Even though negotiations have stalled, the initial plan was to have Walmart incorporate its own eCommerce tools into the platform.

This would allow TikTok users to be directed to Walmart’s products, if they wish to. Talks remain deadlocked, but if the deal eventually goes through, it could spell trouble for TikTok’s partnership deal with Shopify.

The Bottom Line

For now, Shopify merchants have an opportunity to increase their customer base. They can run TikTok campaigns directly from the Shopify dashboard, making it easier to reach their target audience. Plus, they’ll gain a deeper understanding of their customers’ shopping habits.