TikTok Shop GM: Retailers see ‘a generation’s shopping habits are being formed’ on the platform

When TikTok Shop launched three years ago, it was initially known as a platform for deep discounts and emerging brand discovery—but its reputation is changing.

The social commerce platform has proven itself to be a major retail player, becoming the fourth-ranked US health and beauty e-commerce retailer, per NielsenIQ. It’s welcomed CPG giants like L’Oréal and PepsiCo, and now, TikTok Shop’s success is enticing other retailers to get in on the action.

Ulta Beauty, Sephora, and Best Buy all joined TikTok Shop this year, identifying the platform as an increasingly vital channel for reaching consumers by launching livestreams and sharing exclusive product drops and bundles.

Ajay Salpekar, GM of beauty and food and beverage at TikTok Shop, spoke to Retail Brew about retailers’ growing interest in the platform and how TikTok Shop’s original identity as a brand discovery platform is evolving.

This interview has been lightly edited for length and clarity.

How are food and beverage and beauty brands thinking about TikTok as a point of distribution in their strategy now versus a discovery engine?

TikTok Shop has become the discovery destination…That’s where the platform started, and it continues to be really strong at discovery because compelling creator content is so good at surfacing something: 83% of shoppers discovered a new product on the platform, [and] 70% discovered a new brand.

But over time, brands have realized that this isn’t just a marketing platform or a sales platform, and it’s not just for discovery. It’s actually a fundamental part of their channel strategy. So more and more, starting with the beauty category, but now even in food and bev, as brand folks and CMOs think about “How do you launch a product? How do you bring it to market? Where do you look for input to incorporate into your product innovation cycle, creative feedback, or user feedback, or feedback during a live stream, or comments on a short video?” They’re increasingly looking to TikTok Shop—not just as an afterthought or something you do on the side as something that’s only for digitally native brands, but even core CPG brands are considering that as part of their channel mix.

Retailers themselves are coming onto the platform—Ulta, Sephora, Best Buy. What’s driving retailers to want to be on TikTok Shop?

The majority of them recognize that a generation’s shopping habits are being formed and they’re formed by TikTok Shop, and so this is where they have to be for their future. Another reason is just general customer acquisition. Whether or not you’re already a store member or store shopper, probably brands have content on TikTok or are on Shop, and so they want to tap into that. And then some retailers are also using it to drive awareness for the brands, and they’re trying to grow and incubate in the store.

Different retailers have different strategies. I really enjoy that TikTok Shop presents an opportunity for retailers to practice their own strategies. For example, with Ulta, they launched with a set of brands that were part of their in-store exclusive brands that have expanded over time, and they’ve led heavily in lives, including Kecia [Steeleman], their CEO, participating in lives at various events and then doing lives in stores. Sephora, on the other hand, has launched with the drops instead—so very specific, curated drops.

Are consumers coming back to TikTok Shop specifically within food and beverage and beauty to use it as a replenishment engine, or is it really that first buy and then they’re moving to a different platform?

Each shopping behavior is different, but there are programs we have like Subscribe and Save…for sellers to offer product selection where users can set and forget.

And live has been really good for repeat purchases because it roots the behavior where users tune into brand or seller or the creator. We found that 76% of TikTok Shop shoppers have purchased from livestream.

The rise of TikTok Shop and Amazon have led to democratization of distribution. What have you heard from the brands and retailers you work with in terms of TikTok Shop offering them a little bit more power when they’re making their distribution strategy?

The perspective that many brands share—there’s often the question asked, “Is TikTok Shop seen as a retailer or is it seen more as direct to everyone?” This is what many CMOs think through. The most progressive brands recognize that it’s somewhere in between. It gives you the reach of a very large entertainment platform, and it’s really compelling content, but it does enable a brand to choose which products to merchandise, which creators to market…and they can take full control of the end-to-end market. So I think that the most progressive brands think of TikTok Shop as an extension of their direct to consumer. That gives them market-minded reach.