Even though TikTok had more downloads and more money spent on it than any other app in 2023, it was far from the most popular app in terms of real usage. Among the most popular apps in terms of monthly active users last year, Facebook remained at the top, with Messenger, WhatsApp, and Instagram all owned by Meta, followed by TikTok, which ranked fifth. The question now becomes whether the app’s expansion into e-commerce through TikTok Shop is to blame for the slowdown in TikTok’s growth, since new data suggests otherwise.
New research from market intelligence firm Sensor Tower shows that TikTok’s growth is slowing down, but it’s still encouraging. The average annual growth rate of TikTok’s monthly active users in 2022 was 12% per quarter, but in 2023, it dropped to 3% per quarter.
After introducing TikTok Shop to the American market, the company has made the move.
Beginning in November 2022, the video app started testing Shop in the US. At the start of last year, the tests were expanded as more businesses joined, including PacSun, Revolve, Willow Boutique, and beauty brand KimChi Chic, among many others. The Shop was only one of several attempts to turn the popularity of TikTok videos—and by extension, the “TikTok made me buy it” meme—into actual sales, even though it didn’t “officially” start in the US until September 2023.
For instance, in the summer of 2017, TikTok tried out an in-app storefront in the United Kingdom named “Trendy Beat,” where users could purchase items from ByteDance, the parent company of TikTok. The Associated Press and others have stated that producers can earn commissions from products through TikTok’s affiliate network.
As pointed out by Business Insider in November, there have been concerns over retailers’ use of TikTok Shop. Some users have expressed their dismay that the app is being transformed into a “ad-filled wasteland” or a “dystopian” environment. In other online forums, Redditors have been discussing whether TikTok Shop has “ruined” the app by attracting “people dropshipping/selling cheap products,” as one user put it.
“In my opinion, it’s becoming increasingly annoying how the vast majority of videos on my [For You Page] involve people exaggerating the benefits of a product from the Shop feature in an effort to generate a lot of commissions and go viral,” expressed Reddit user u/megg-salad-sammich in September. “It’s fantastic that it’s a new way for creators to earn money, but I’m becoming increasingly annoyed by the fact that almost every video is attempting to sell me something,” they remarked.
Looking through Reddit’s discussions from last year reveals a lot of people talking about the same thing: how TikTok Shop has made the app “annoying” and how annoying it is to see adverts every few videos.
As people adjust to TikTok’s new role as an online mall, the software that enables the company’s e-commerce initiative, Shop Seller, has surged in popularity.
The Shop Seller has experienced “robust” growth since the fourth quarter of 2022, according to Sensor Tower data. As of the fourth quarter of 2023, the growth rate had increased by 230% year-over-year. Nevertheless, the app’s user base is far smaller than TikTok’s 1.4 billion active users as of the first quarter of this year. Meanwhile, the company revealed that Shop Seller has approximately 6 million active users per month.
Since Meta-owned TikTok eliminated its Shop page in January of last year and live shopping in March, Instagram stands to gain from user ire around TikTok Shop. For those who would like not to be bombarded with in-app purchase prompts, this may make it more palatable.
The larger industry factors that prompted Meta to act do not appear to be good for the future of TikTok Shop. During the epidemic, online sales increased dramatically, and live shopping flourished. However, once things settled down, it was discovered that social commerce, which includes live shopping, accounted for just approximately 5% of all U.S. e-commerce sales in 2022. That seemed to suggest that American customers weren’t quite ready to buy straight from videos, even though they are still impacted by internet trends.
Users still aren’t mad enough about TikTok Shop to download Instagram Reels instead.
According to Sensor Tower, since the TikTok Shop Seller app was launched, Instagram’s monthly active user growth has been reasonably stable at “mid-single digits” and hasn’t been adversely or favorably affected.
Appfigures data corroborates these findings and adds that, while TikTok’s income has been on the rise, the app’s downloads have been flat or declining for over a year, regardless of location in the world.
Image Credits: Appfigures
Image Credits: Appfigures
