The Undetected Boom of TikTok Livestreams

November 9th, 2022 by

Over the past few weeks, we’ve seen article after article discussing how livestreaming and livestream shopping isn’t being adopted in the West… but this isn’t entirely accurate. 

While livestreams may be struggling on other platforms, they are a hit over on TikTok. In the last two years, TikTok’s livestreaming revenue has grown a whopping 900%. Yes, you read that right. 900%

In 2021, 80% of TikTok’s revenue came from online ads and 15% from livestreaming. The majority of livestreaming revenue comes from digital gifting—where viewers give creators money through digital gifts. It’s been reported that TikTok takes up to nearly 70% of digital gift donations, so it’s unsurprising that TikTok pushes livestreams in the For You Page so much. 

The potential for huge return on live-streamed content is partially why TikTok has decided to focus on creating a US shopping empire, even though the platform struggled to make TikTok Shop profitable in the UK. 

In addition to this, although the revenue isn’t huge (yet), a global study in 2021 revealed that 62% of TikTok LIVE users watch live content daily. TikTok users in general are 1.6x more likely than non-users to watch branded livestreams and discover brands. Although, it’s important for brands to remember 77% of users prefer watching branded LIVEs hosted by creators, compared to 68% for brand ambassadors. 

Amazon, Meta and Walmart have all tried to recreate the success of China’s live ecommerce market in the US, but ultimately failed. 

TikTok’s ambitious attempt, dubbed Project Aquaman, is the first to directly borrow tactics that were first perfected in China. At the heart of TikTok’s strategy is a decentralised network of around 20 “TikTok Shop Partners,” which include small Chinese social media agencies and U.S. tech startups that specialise in livestream e-commerce, like Shop LIT Live. 

These partners will guide brands and manufacturers through every step of running a livestream shopping business, covering content planning, filming, and hiring hosts to run the broadcast. This approach mirrors how ByteDance grew Douyin’s live ecommerce business into a powerhouse over the past two years. 

TikTok has hosted training webinars and opened TikTok Academy to teach its partners the best ways to sell products via livestreaming. The platform discusses even the smallest aspects of hosting a successful livestream, from the recommended lighting, how hosts should dress, and the optimal time to go live. 

TikTok hopes the effort will be able to convert its huge influence on American tastes into a highly lucrative revenue stream. It already has 100M users in the US, 70% of whom are teenagers. Many already use the platform as a research and discovery tool, and the hashtag #TikTokMadeMeBuyIt has more than 28.5B views. 

McKinsey forecasts that if the West were to follow China’s steps  of livestreamed commerce, it could account for up to 20% of all online sales by 2026. But in order to achieve this, TikTok needs to crack the West’s different online shopping culture. 

Western consumers have learnt to shop through websites, not social media apps. There’s no doubting TikTok’s ability to influence a purchase decision, but consumers need to learn to trust social platforms with their purchasing data and money—something some platforms have proved they can’t be trusted with. 

However, despite potential risks and setbacks, we don’t think TikTok will be giving up on TikTok Shop any time soon. 

Our Influencer marketing agency and Social agency are located worldwide, with our agency network based in the USA, UK, UAE and China.

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