In 2023, TikTok may have been the most downloaded and spent-on app in the world, but it wasn’t the most used app. In terms of monthly active users, Facebook stayed on top again last year. Other apps owned by Meta, like WhatsApp, Instagram, and Messenger, came in next, all ahead of TikTok at No. 5. Now, new data shows that TikTok’s growth has slowed down. This makes us wonder if the app’s move into online shopping with TikTok Shop is to blame.
New data from market intelligence company Sensor Tower shows that TikTok’s growth is still positive, but it is slowing down. Over the course of one quarter in 2022, TikTok’s monthly active users grew by an average of 12% year over year. In 2023, that number dropped to 3% year over year per quarter.
Following the launch of TikTok Shop in the U.S., the change has been made.
Shop was tested by the video app in the U.S. for the first time in November 2022. At the start of last year, more brands joined the tests, such as PacSun, Revolve, Willow Boutique, and the beauty brand KimChi Chic. There were a few different attempts to turn the popularity of TikTok videos (the whole “TikTok made me buy it” joke) into real-world sales before the Shop “officially” opened in the U.S. in September 2023.
While I was in the U.K. last summer, TikTok tried out an in-app shopping area called “Trendy Beat,” which sold goods made by ByteDance, the company that owns TikTok. The AP and other news outlets have reported that TikTok also has an affiliate program that lets creators make money from selling goods.
Business Insider reported in November that sellers’ love of the shopping platform was starting to make people complain. Some people were upset that TikTok Shop was making the app into a “ad-filled wasteland” and a “dystopian” place. People on Reddit have been talking about whether TikTok Shop has “ruined” the app by making it full of “people dropshipping/selling cheap products,” as one of them put it.
In September, u/megg-salad-sammich wrote on Reddit, “I’m starting to get really annoyed by how almost every other video on my [For You Page] is someone overselling a Shop item to try to get it to go viral and make a lot of commissions.” They said, “It’s great that there’s a new way for creators to make money, but I’m scrolling less and less because I know almost every video is just trying to get me to buy something.”
A check on Reddit shows that many more threads from last year complained about the same thing: that TikTok is “annoying” now because of TikTok Shop and that seeing ads every few videos is annoying.
People who use TikTok are getting used to the fact that it has become an online shop. At the same time, TikTok’s Shop Seller app, which runs its e-commerce business, has grown.
Sensor Tower data shows that the Shop Seller’s growth has been “robust” since the fourth quarter of 2022. As of the fourth quarter of 2023, it had grown 230% year-over-year. But the app doesn’t have nearly as many daily users as TikTok, which has 1.4 billion as of the first quarter of this year. For Shop Seller, the company said that it has about 6 million monthly active users.
TikTok Shop, which is owned by Meta, got rid of its own Shop tab in January of last year and stopped live shopping in March. This could eventually work out well for Instagram. People who don’t want more clear calls to action might be more likely to shop in-app if this is the case.
Meta’s move was caused by trends in the industry as a whole, which don’t look good for TikTok Shop’s future. During the outbreak, live shopping grew, and online sales went through the roof. When things got back to normal, though, it was found that social commerce, which includes live shopping, only made up about 5% of all e-commerce sales in the U.S. in 2022. That made it look like U.S. shoppers might not have been as ready to buy straight from videos, but it’s clear that online trends still have an effect on them.
Users aren’t so mad at TikTok Shop yet, though, that they’re leaving it for Instagram Reels.
Sensor Tower discovered that Instagram’s monthly active user growth has been pretty steady at “mid-single digits” and hasn’t changed much for the better or worse since the TikTok Shop Seller app came out.
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Appfigures data also supports this finding, but it also says that while TikTok’s revenue has been going up, its downloads have been staying the same or going down more than going up. This has been happening for over a year, both in the U.S. and around the world.
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