TikTok may have been the world’s top app by downloads and consumer spending in 2023, but it wasn’t the top by actual usage. Last year, Facebook again held the No. 1 spot by monthly active users, followed by other Meta-owned apps WhatsApp, Instagram and Messenger — all ahead of TikTok at No. 5. Now, new data shows that the TikTok’s growth has begun to slow, raising the question of whether the app’s transition to e-commerce through the TikTok Shop is to blame.
According to new data from the market intelligence company Sensor tower, while TikTok’s growth remains positive, that growth is slowing. In 2022, TikTok’s monthly active users grew by an average of 12% year-over-year per quarter, but this rate decreased to 3% year-over-year per quarter in 2023.
Change comes after Introducing TikTok of the TikTok Shop in the US
The video application began testing the Shop in the US in November 2022 and those trials expanded early last year as more brands came on board, including PacSun, Revolve, Willow Boutique and beauty brand KimChi Chic, among others. While the Shop didn’t “officially” launch in the US until September 2023, it was just one of many attempts to translate the influence of TikTok videos — essentially the entireTikTok made me buy it” meme — in real-world sales.
Last summer in the UK, for example, TikTok experimented with an in-app shopping section called “Trendy Beat,” which offered products sold by TikTok’s parent company ByteDance. TikTok also offers an affiliate program that allows creators to earn commissions from products such as the app and others have reported.
But sellers’ embrace of the shopping platform has begun to lead to complaints, as Business Insider noted in November, with some lamenting that the TikTok Shop was turning the app into an “ad-filled wasteland” and a “dystopian” space. Elsewhere on the web, Redditors are debating whether TikTok Shop has “broken” the appwhich is now full of “people dropping/selling cheap stuff”, as one Reddit user put it.
“Personally, I’m getting really annoyed with how almost every other video of mine [For You Page] is someone who hypes a product from the Shop mode to try to make it go viral and get a lot of commissions.” wrote Redditor u/megg-salad-sammich in September. “It’s great that it’s a new avenue for creators to make money, but I find myself scrolling less and less because I know almost every video is just trying to get me to buy some random thing,” they said.
A search on Reddit finds Many more threads complaining the same thing over the past year — saying how TikTok is “annoying” now because of TikTok Shop and seeing ads every few videos is a frustrating experience.
While TikTok users adapt to their favorite social network and it turns into an online shopping mall, TikTok’s Shop Seller app, which powers its e-commerce initiative, has grown.
Sensor Tower data indicates that Shop Seller growth has been “robust” since Q4 2022, up 230% year-over-year since Q4 2023. However, the app only has a fraction of the active user base of TikTok — currently 1.4 billion as of the first quarter of this year. Shop Seller, meanwhile, has just about 6 million monthly active users, the company said.
Instagram could finally benefit from user frustration surrounding the TikTok Shop, given that the Meta-owned app removed its own Shop tab in January of last year and killed live shopping in March. This could potentially make it more tangible for those who want to avoid more direct calls to action for in-app purchases.
Meta’s move was sparked by broader industry trends, which don’t seem to bode well for the future of the TikTok Shop. Live markets had flourished during the pandemic and e-commerce sales soared. But when things returned to normal, social commerce (including live markets) was found to have they made up only about 5% of total e-commerce sales in the US by 2022. This seemed to indicate that US consumers may not have been as ready to shop directly from video, although they are obviously still influenced by online trends.
However, users are still not so upset with TikTok Shop that they abandon the app for 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 by the launch of the TikTok Shop Seller app.
Data from another company, Appfigures, also supports that conclusion, but adds that while TikTok’s revenue is growing, its downloads have stagnated or fallen more than they’ve grown — a trend that’s continued for more than a year , both globally and in the US
Image Credits: Appfigures
Image Credits: Appfigures
