TikTok Shop Is Coming For Beauty E-Commerce. Will It Last?

A year out from its debut in the United States, TikTok Shop has quickly become a force to be reckoned with in the world of beauty e-commerce, and it shows no signs of slowing down.

Fueled by a robust creator program and subsidized incentives to entice brands and consumers onto the app, TikTok Shop was ranked the 9th largest online beauty and wellness retailer in the U.S. in February, up from the 22nd spot in August last year. Health and beauty sales on it totaled just under $400 million for the six-month period ending in late January, according to consumer insights firm NIQ. Apparel and accessories and home and kitchen were the second and third top-selling categories, respectively. 

Drawn in by increasing demand, sellers are flocking to TikTok Shop in huge numbers with established brands like Rare Beauty, Rhode, Huda Beauty, Youth To The People, Elf and NYX setting up storefronts on the app. According to the publication Bloomberg, TikTok Shop more than doubled its merchant count at the end of last year, registering over 500,000 sellers and brands. Approximately 170 million people in the U.S. use TikTok.

Beauty brands’ growing investments into TikTok Shop aren’t slowing even as the app faces renewed scrutiny from U.S lawmakers. According to a law signed by President Joe Biden last April, ByteDance, TikTok’s Chinese parent company, must sell the company to an American buyer within nine months. If it fails to do so, TikTok will disappear from Apple’s and Google’s online stores in the U.S. The app was previously targeted for sale in 2020.

As TikTok enlarges its position in beauty retail, and its fate in the U.S. remains shaky, we were curious how the beauty industry envisioned its future. For this edition of Beauty Independent’s ongoing series posing questions relevant to emerging beauty, we asked 11 brand founders and consultants the following questions: Do you think the TikTok Shop craze will last with beauty brands and consumers? Are you bullish on the future of TikTok Shop as a force for beauty retailing? Where do you see it a year from now?

Leslie Ann Hall Founder and CEO, Iced Media

TikTok Shop is now the 9th largest beauty retailer in America and the data shows that, overwhelmingly, TikTok beauty shoppers both want to buy from larger, established brands and smaller, lesser known brands. The takeaway is that as TikTok Shop nears its one year anniversary this September, there’s a greater expectation from users that they will be able to discover, research and shop their favorite brands on TikTok. Beauty is TikTok’s number one category in GMV (gross merchandise value) so I believe beauty brands are appropriately fascinated, and those doing it right will continue to see real business results. I also expect the holdouts will come around soon too.

I’m absolutely bullish on the future of TikTok Shop. The magic of TikTok Shop is that it combines America’s number one entertainment platform with real time, frictionless shopping in a way that has never existed. Long before TikTok launched shopping, the platform was responsible for mainstreaming beauty trends - like Cottage Core, Tomato Girl, Mob Wife etc. - that fuel growth in our industry. That hasn’t changed, except now it’s easier than ever for brands to curate product assortments and produce compelling, education-driven content to help viewers achieve these looks and transact in real time. 

In a year from now brands will be more intentional with their merchandising strategy and lean more into creating limited time, limited edition, FOMO-inducing impulse buys that are more native to the zeitgeist that only TikTok can deliver on.

Sonia Elyss Founder, Lipserviceworld

I do think TikTok Shop will continue to be a valuable resource for brands and an interesting way for consumers to discover new products in the beauty industry. As we see more established brands like Benefit Cosmetics, Tarte, Kosas, Estee Lauder, etc become active on TikTok Shop, it brings a sense of trust to the consumer which bodes well for the future of the platform. 

While I do believe the fever-pitch frenzy has died down, I don't expect the retail arm of TikTok to fade away anytime soon. I know from first-hand experience that it can take a brand several months to onboard and launch a new shop - something I am sure TikTok is trying to remedy ASAP - but I can say wholeheartedly I still think it is beneficial for a brand to onboard onto the platform. If you have a presence on TikTok and you are willing to push things to the next level with content and exposure, TikTok Shop is a great next step.

A year from now, I see TikTok Shop still functioning similarly to the way it does today, but with an improved user experience for everyone involved: brand, consumer and influencer. Additionally I predict we will continue to see the growth of live shopping through TikTok Shop, and with that, brands will have to find forward-facing talent to host these live events.

I personally believe the most natural next step is to incorporate live shopping into influencer deals. The right influencer who can speak to your product and industry will likely make a great live shopping host. I'm excited to see deals like this evolve in the coming months.

Rachel Reid Founder, Subtl Beauty

I’m cautiously optimistic. I think in-platform shopping reduces friction for customers, and it’s great for every business to have channel diversification options. From what we are seeing, TikTok Shop affiliate participation is still very low so any boom being experienced in the industry will likely continue to grow over the next 6-8 months as affiliate participation ticks up.

That being said, we also have to acknowledge the fact that TikTok is heavily subsidizing product pricing to encourage shopper adoption, some as much as 80%. This is something we also saw with Facebook when they first launched shops, and they were never quite able to get the market share they’d hoped.

I don’t think any of us can know how TikTok Shops will perform on a 12-month outlook, not without understanding the impact that reduced/removed subsidization will have on buyer interest long-term.

Namrata Kamdar Founder, Pleniare

From what I understand, the excitement around TikTok Shop is genuinely warranted and it has become a far more lucrative form of customer acquisition than alternative methods. I think what is also attractive about TikTok Shop is the fact that it has become the virtual beauty "water cooler" moment. It is THE destination for trending viral products and beauty hacks and is a discovery platform for niche and indie brands that you can't find anywhere else. It has its own cachet unlike other social media platforms.

Secondly, the strategic vision for Meta and TikTok have become different. Despite everything, it's clear that Meta wants to be the world's biggest advertising platform. Its main objective is to monetize its users (somewhat ruthlessly), even at the cost of user experience and quality of content. It’s become pay-to-play. 

TikTok on the other hand intends to become a competitor to e-commerce giants like Amazon but it’s starting from a content creation perspective. They are incentivizing brands and creators in a way that feels more engaging. They aren’t about revenue alone at the cost of customer experience…so far. It's almost like Instagram and Meta have been repositioned as the second place to auto-post content once it's live on TikTok.

Finally, from a brand owner's perspective, TikTok's approach from algorithm to product fulfillment via TikTok Shop makes it the clear winner for small emerging brands. If TikTok continues to engage and reward brands this way and build on its strengths here, it will remain a coveted, valued and original beauty platform.

Aliett Buttelman Co-Founder, Fazit Beauty

The fascination around TikTok Shop stems from its novelty and the ongoing process for brands to unlock its full potential and determine its value. As long as TikTok continues to have a strong user base, there will always be a demand to simplify the shopping experience and make it easier for consumers to discover and purchase products directly on the platform.

TikTok plays a crucial role in the brand awareness and marketing funnel. Depending on a brand's strategy, community engagement, and ability to drive views and virality, TikTok can serve as an explosive lever and a significant sales channel.

As a TikTok native brand, Fazit has always been bullish on our organic content strategy. Now, it's about figuring out if TikTok Shop has sustainable growth opportunities and is scalable. It still feels like a bit of the wild west because of its newness, and everyone is learning how to apply their digital strategy of media buying, content, and sales to this new channel. 

A year from now, I think there will be more sophistication and more expertise on how to drive conversions on TikTok Shop. The future looks promising, but it will require continuous adaptation and learning.

Ryan Babenzien Co-Founder and CEO, Jolie

I was incredibly bullish on TikTok Shop when they offered Jolie a creative way to help promote TikTok Shop earlier this year. To say it was a challenge working with TikTok as an organization is an understatement. There was a bunch of turnover within the organization, technology issues and a host of other things that ultimately caused us to hit the pause button with TikTok Shop; or at least not invest any resources in it for now.  

None of this is surprising, actually, because when you have a platform that scales like TikTok has, you're bound to experience bumps in the road. That said,  I'm hopeful our experience was a moment in time because TikTok Shop should work and become a viable sales channel for brands…eventually.

If TikTok Shop is not scaling within the next 6 months it likely will be a failed product, so I think we'll all know well before a year from now.

Stacey Levine Brand Marketing and Communications Consultant

The beauty industry’s fascination with TikTok Shop is reflective of broader trends, particularly that the future of e-commerce is social-first.

For beauty consumers, TikTok Shop makes product discovery and shopping feel seamless and immersive, rather than transactional. It provides a seamless path to purchase – from discovery, to reviews, to purchase – all on the same platform. It’s also an easy affiliate strategy for TikTok creators, enhancing its appeal, though this can be a double-edged sword as heavy product promotion can impact audience trust and cause fatigue from over-saturation.

The craze has been amplified even further by TikTok subsidizing discounts and shipping costs to encourage shopping on the platform. For example, brands that would typically cap discounts at 15% now have products being sold up to 40% off. With TikTok’s core Gen Z audience being particularly cost-conscious, this is an attractive incentive. This also benefits brands of all sizes and creates new ways for indie beauty brands to get exposure by attracting new customers, without impacting their bottom line. It’s worth considering how shopping habits will change if/when these steep discounts go away.

As a marketing consultant, I believe the seamless consumer experience and benefits for both brands and creators outweigh the potential challenges. TikTok Shop will likely continue to grow — even as it navigates the regulatory scrutiny it faces in the U.S. — and capture a large share of the social commerce market in the beauty industry. The key factor rests on TikTok Shop providing ongoing value for brands, creators, and consumers alike, and we will continue to see TikTok as a leading force for beauty retail.

Colm Mackin CEO, Act + Acre

I think the current hype around TikTok Shop is here to stay for a while. It's combining social media and shopping in a really fun and engaging way that both consumers and brands are exploring in new ways.

The platform itself has invested heavily in promotions on TikTok Shop, especially around events like Black Friday and Cyber Monday. They're covering the cost of discounts for brands, showing they’re serious about becoming a major player in online shopping. This approach has allowed brands to offer great deals to customers while still making a profit, which is a win-win.

On the influencer side, we’ve heard many thoughts from our creators on how TikTok Shop is impacting their partnerships and the way customers are interacting with their content. While still slow for some, they are unanimous in it being an important part of their strategy. 

For us, we’ve tested a ton. What it comes down to is the specific product that is being featured in the creator campaign. As a luxury brand with higher price points, we needed to shift to lower-priced SKUs that appeal to the 16-20 age demographic. 

Even though TikTok shopping has been a bit slow to take off, I believe it’s here to stay and will continue to evolve. TikTok excels at prioritizing engagement, and then integrating the shopping function from there. This approach is crucial for gaining trust and converting users.

So, I'm definitely optimistic about TikTok Shop’s future in beauty retailing. In a year, I see it becoming even more important, particularly in how creators monetize on the platform. With more brands jumping on board and more consumers getting hooked on this easy and entertaining way to shop, TikTok Shop will likely keep evolving the shopping experience to be even more seamless and fun, keeping both brands and consumers excited.

Priyanka Ganjoo Founder and CEO, Kulfi Beauty

TikTok Shop will continue to grow in beauty. Consumers love TikTok Shop because they discover new products that provide the satisfaction of an impulse purchase combined with value pricing and deals. This consumer profile has always existed, and TikTok Shop is uniquely positioned to capture this demand by combining compelling content and affiliate. 

A year from now, I expect the platform to mature further. For example, we could see "top sellers" emerge who are able to sell most effectively. Similarly, we'll see more products designed for TikTok Shop, with the product proposition, pricing, and supply chain set up to succeed in the platform with the highs and lows of virality. 

A challenge and opportunity for brands on TikTok Shop is to elevate the consumer conversations beyond the product and transaction level. As a brand, you don't want to be one in the masses of undifferentiated products and dupes.

Rohit Banota Founder, Jump Accelerator

Indie and early-stage beauty brands often hit a plateau in consumer loyalty and need a new strategy to grow after reaching a certain 7-figure mark. TikTok Shop provides an innovative solution by offering a more engaging discovery experience compared to relatively traditional platforms like Sephora.

With its vast user base, TikTok turns entertainment into a shopping funnel, introducing more consumers to innovative beauty brands than other channels. While it doesn't fully replicate the sensory appeal of in-store shopping, it complements brick-and-mortar experiences rather than replacing them. However, maintaining loyalty is a challenge, as TikTok's platform favors new customer acquisition over retaining existing ones. Partnering with creators who attract the right consumers is crucial for brand success. 

TikTok’s primary goal should be to increase brand discovery for as many consumers as possible, broadening the funnel for numerous brands. By the time a new platform emerges, most consumers would have already moved down the TikTok funnel, making it difficult for competitors to catch up. Then let the brands take over the shop to work bottom of the funnel by creating a unique experience around their promise and identity. This is how TikTok will be relevant for years from now.

Julia Rubien Founder and CEO, Amie Social

TikTok Shop used to be an experimental channel only pursued by a few pioneering beauty brands. Now, all of the beauty brands we work with are choosing to participate in TikTok Shop on some level, big or small. As affiliate revenue grows, there is more appetite for TikTok Shop. On the other side of that equation: as more creators earn commission as affiliates, it encourages greater participation from others who want to join in on this new stream of income.