After an impressive streak of unbelievable growth in users and engagement, TikTok is losing steam and some think that the recent flood of ads related to its TikTok Shop may be to blame. In 2023, TikTok experienced slower growth in its number of monthly users, sparking discussions about what may be at fault.
Sensor Tower, a company that analyzes market data, reports that TikTok is still growing, but not as quickly as before. While in 2022, the number of people using TikTok each month grew by an average of 12% every quarter, this growth slowed to just 3% in 2023.
TikTok seems to still be dominant culturally but overall its engagement numbers are starting to sour. Despite being the most downloaded app and leading in how much money consumers spent on it globally in 2023, TikTok ranked fifth in terms of monthly users. It was behind Facebook and other apps owned by Meta, like WhatsApp, Instagram, and Messenger.
The Emergence of TikTok Shop
This slowdown coincides with the launch of TikTok Shop, making some critics believe that the rise in advertising may be pushing users away.
The app first tried out Shop in November 2022, and more brands like PacSun, Revolve, Willow Boutique, and KimChi Chic Beauty got involved early in 2023. TikTok Shop officially launched in the US in September 2023 as part of TikTok’s plan to make money from its popular videos.
TikTok Shop allows users to sell products directly in the app through regular in-feed videos as well as LIVES and a dedicated “Showcase” tab. The platform’s creator monetization is extremely poor compared to other social media platforms so creating TikTok Shop ads has become quite popular with creators of all sizes.
In the U.K., TikTok tested a shopping feature within the app called “Trendy Beat,” which sold products from ByteDance, its parent company. TikTok also has a program where creators can make money by promoting products.
User Discontent and Quality Concerns with TikTok Shop
TikTok Shop has been criticized for filling the app with too many ads and low-quality products, as discussed by Reddit users on different threads.
Many users are unhappy with the growing number of ads and promotions they see in their video feeds. They feel that this push for more shopping on TikTok is too aggressive and spoils their experience on the app.
There are also complaints about the quality of items sold on TikTok Shop. Users often find the products to be of poor quality, describing them as “cheap”. The disappointment is heightened when products received are not as good as advertised, sometimes after a long wait for delivery.
There is a feeling among users that TikTok is focusing more on making money than on the quality of the user experience. This shift towards more ads is seen as moving away from the original spirit of TikTok, leading some to miss the less commercial version of the app.
This is despite the fact that TikTok reports success with skippable ad formats, saying that 73% of viewers agree that having the ability to skip videos makes them more engaged in the experience, and 56% of viewers are more likely to actively watch videos sponsored by a brand when they have the option to skip.
Exploring the Growth and Challenges of TikTok Shop Amidst Shifting Social Media Trends
Even with these problems, TikTok’s Shop Seller app has grown a lot. Data from Sensor Tower shows that in late 2023, it grew by 230% compared to the year before. However, it’s important to note that the app’s user base of about 6 million is much smaller than TikTok’s overall 1.4 billion users.
Instagram may be the biggest beneficiary of TikTok’s slump as it may capture users who were unhappy with TikTok Shop. Early in 2023, Instagram, which is part of Meta, removed its shopping section and stopped its live shopping feature. This could attract people who want a less shopping-focused experience on their social media.
Meta’s choice to reduce shopping on Instagram reflects a broader industry trend. In 2022, only 5% of all online sales in the US came from social media platforms. This indicates that most people are not that interested in buying things directly through social media videos, even though they are influenced by what they see online.
Yet, TikTok Shop hasn’t driven users to abandon the app in favor of Instagram Reels. Sensor Tower notes that Instagram’s monthly active user growth remains consistent, unaffected by TikTok Shop’s launch.
In fact, TikTok reports that its platform is 58% more likely to deliver a happy experience than similar digital video platforms – which is why, as of 2023, users spent “a movie’s worth of time on the platform daily”.