Why More Entrepreneurs Are Turning To TikTok
This is an article “Why More Entrepreneurs Are Turning To TikTok” by Marc Primo
You probably remember the first time you tried out TikTok and saw a variety of cringe-worthy challenges and dance numbers on your screen. You were left wondering what on earth you just watched, then minimized the screen and went back to your Facebook feed instead. Somehow, you've assumed that this type of video platform can never be suitable for those who are serious in business. However, it might be a good idea to tap the app and look again as more entrepreneurs are beginning to see the value of this hugely popular social media platform. And upon closer inspection, it is showing no signs of slowing down.
In just a short span of five years since it first appeared on Google Play and the App Store in 2016, TikTok has become the latest social media channel for those engaged in business. Catering to short-form video content that appeals predominantly to Generation Zers and Millennials, the platform's meteoric rise began back in 2017. With the COVID-19 pandemic forcing people to stay home, TikTok suddenly became the most downloaded app worldwide in 2020.
Having a feel of the app at first may give new users the impression that the platform is far from business-oriented. With its countless viral dance trends and often incomprehensible 15-second clips from users, only a few may have foreshadowed its true potential – a hub for content creators and companies that are looking to earn. These days, more small to medium businesses (SMBs) have signed up on TikTok to try and engage a slice of its 1 billion monthly active users and drive sales.
But how legitimate is TikTok really for business?
The rise of TikTok and the most valuable startup in the world
TikTok came from a Chinese startup company called ByteDance which initially called the app Douyin. In 2017, ByteDance bought the app Musical.ly where users could lip-sync to 15-second music videos with accompanying soundtracks and video effects. At the time, Musical.ly had over 200 million accounts, which TikTok eventually acquired and grew exponentially.
Users soon found something unique in TikTok that other prominent social media platforms like Facebook, Instagram, and Twitter weren’t offering. With 92.9% of its users comprising the younger generation, TikTok became the preferred social media channel for Generation Zers and younger Millennials, who happen to be the most significant consumer demographic today. In fact, according to PwC's global consumer survey in March 2021, 35% of the total consumer population in the world is Generation Z, while Millennials represent the largest group who shop daily at 43%.
By mid-2020, ByteDance had become the most successful startup globally, with a reported valuation of $140 billion, while TikTok increased its value to $50 billion. By the end of the year, total app downloads had reached over 2.6 billion.
Why use TikTok for Business?
Being the leading social media app for Generation Zers and Millennials, more businesses have turned to TikTok to increase their online presence and brand awareness. With last year's issue of an impending ban in the US as announced by the former Trump administration, the app has proven its resilience in the online market, while also creating a huge buzz worldwide without going public.
While the marketing aspect within the platform is still in its early stages, SMEs have found fresh opportunities and techniques to push their brands via catchy content that generates clicks. Traditional tactics wherein advertisers highlight a brand's unique selling points don't seem to work on the platform. However, businesses learned to go for more lighthearted campaigns that appeal primarily to young consumers and go viral.
Among the big-name brands that have achieved marketing success via the platform are Chipotle and the NBA, among many others. The restaurant chain ran a Halloween coupon giveaway, wherein they encouraged users to post their costumed images on the app and generated over 4 billion views. On the other hand, the NBA drew over 12 million followers comprising Generation Z and Millennial audiences upon joining the app.
The app held its first-ever event last March dubbed Ready, Set, Grow for SMBs who want to learn more about the app's potential for marketing. The event coincided with the launch of a self-serve marketing feature that allows businesses to buy and manage ad campaigns via the app. The move attracted SMBs and more household name brands to the app, including Dunkin', Pepsi, and Aldo.
Recognizing how SMBs pump more significant revenues for social media platforms, TikTok continued building its long tail campaigns for small businesses as many remain hopeful towards achieving a rebound once the pandemic smoke has fully cleared.
Getting the most out of TikTok
From content creators to SMBs that engage in eCommerce, TikTok has become one of the top social media channels for businesses at the height of the pandemic. Last year, it registered over $1.9 billion in revenue or nearly a 500% year-on-year increase from 2019's 350 million.
More businesses are now familiar with how the platform's marketing features work, thanks to the Ready, Set, Grow event. From how easy it is to set up an ad account, reviewing trends from niche markets, to creating content via its in-platform tools that bring the best out of crude organic posts, TikTok has made itself an excellent marketing platform.
Aside from its useful eCommerce features, the app also focuses on content generation to help brands build loyalty among users and manage web sales via its partnership with Shopify. Online store templates and seamless online transactions help SMBs to drive sales, while expanding their audience base.
Perhaps, the biggest discovery that SMBs learned during the event was that conventional ads wouldn't drive much traction to their campaigns. TikTok users prefer more organic or influencer-driven videos that have the potential to trend. Such a straightforward marketing approach gave birth to TikTok ads that seem exclusive to the platform and entirely different from marketing campaigns of other social media apps. Simply put, TikTok offers a unique opportunity for businesses to grow their online presence in a low-cost, yet highly efficient manner.