TikTok is testing a new feature that could make all video posts on the social media platform shoppable.
The feature, which was first reported by Bloomberg and confirmed by a TikTok spokesperson, uses technology that automatically identifies objects in video content and then links to similar products available in TikTok Shop. Previously, only creators with sizable followings or brands that had set up a TikTok Shop could create shoppable posts.
At the moment the new feature is still in the testing phase, and according to Bloomberg the matched results aren’t always perfect. As one example, Bloomberg cited a post from a woman who polishes stones serving up results for products including a gold ring and metallic press-on nails.
TikTok launched its Shop capability in September 2023, and while many sellers reported impressive sales during the recent holiday period and even before, that success came at a cost to TikTok, which is estimated to have lost more than $500 million on its Shop endeavor in the U.S. in 2023, according to The Information.
Making more content on the site shoppable would clearly help the offering’s profitability. In fact, multiple sources have reported that TikTok is aiming to sell $17.5 billion worth of goods in the U.S. this year, a 10X increase from 2023. Earlier this year, the platform also told sellers that it will start raising the commission it charges on most items sold through TikTok Shop.
Sales generated through general user content would eliminate the need to pay any commission in some cases, and also could make the experience more palatable for consumers, some of whom have complained about the commercialization of content on the platform.
TikTok to Build Physical Studios in the U.S.
In separate but related news, The Information is also reporting that TikTok plans to open studio locations in several U.S. cities, beginning with Los Angeles. Citing people familiar with the project, The Information reports that each location would feature multiple studios that could accommodate dozens of creators per day shooting livestreamed and promotional content.
The model is one already used by short-video app Douyin, which is also owned by TikTok parent company ByteDance, in China. In addition to giving creators a more professional setting for filming, manufacturers also would be able to send products to the TikTok studios so creators could promote them.
While the project will begin in LA, the long-term goal is to open multiple facilities. The financial arrangement isn’t ironed out yet, but TikTok leaders have reportedly discussed subsidizing the cost of studio-created content as well as charging creators a membership fee to access the facilities, and working with agencies to coordinate product promotions.