Is TikTok Shop Responsible for the Decline in TikTok Usage?

Now, new data indicates that TikTok’s growth has started to slow, begging the question if the app’s move into e-commerce via TikTok Shop is to blame. According to new data from market intelligence firm Sensor Tower, while TikTok’s growth remains positive, that growth is decelerating. The change comes on the heels of TikTok’s launch of TikTok Shop in the U.S. While TikTok users are adapting to their favorite social network turning into an online mall, TikTok’s Shop Seller app, which powers its e-commerce initiative, has grown. However, users aren’t yet so upset with TikTok Shop as to abandon the app for Instagram Reels.

TikTok may have dominated the world of app downloads and consumer spending in 2023, but when it comes to actual usage, the popular app falls behind. Despite its massive popularity, Facebook continues to hold the top spot for monthly active users, followed closely by its subsidiaries, WhatsApp, Instagram, and Messenger. Surprisingly, TikTok ranks at #5, begging the question of what could be causing its recent slowdown in growth.

According to new data from market research firm Sensor Tower, while TikTok’s growth remains positive, its pace is slowing down significantly. In 2022, the app saw an average quarterly growth of 12% in monthly active users. However, in 2023, this figure dropped to a mere 3%.

This decline coincides with the launch of TikTok Shop in the United States. The app began testing its e-commerce feature in November 2022, and expanded its reach at the beginning of the following year as more brands jumped on board. Notable examples include PacSun, Revolve, Willow Boutique, and beauty brand KimChi Chic, among others. Although TikTok Shop was not “officially” released in the U.S. until September 2023, it was just one of many efforts to translate the influence of TikTok videos – particularly the popular “TikTok made me buy it” trend – into real-world sales.

Similar attempts were made in other countries, such as the U.K.’s “Trendy Beat,” a section within the app that offered products sold by TikTok’s parent company, ByteDance. Additionally, TikTok offers an affiliate program where creators can earn commissions from product sales, as reported by the AP and other sources.

But the app’s move into e-commerce has sparked some complaints, as Business Insider noted last November. Some have expressed concerns that TikTok Shop is turning the platform into an “ad-filled wasteland” and a “dystopian” space. Elsewhere on the web, Redditors have debated the app’s downfall due to TikTok Shop’s prevalence of “people dropshipping/selling cheap products.”

In fact, Redditor u/megg-salad-sammich wrote in September, “I’m starting to get really annoyed by how almost every other video on my [For You Page] is someone overhyping a product from the Shop feature to try to get it to go viral and make a lot of commissions. It’s great that it’s a new avenue for creators to make money, but I find myself scrolling less and less because I know pretty much every video is just trying to get me to buy some random thing.”

A quick search across Reddit reveals many more similar complaints throughout the year, with users expressing their frustration with the constant presence of TikTok Shop and advertisements on their feeds.

Despite some users’ annoyance with the e-commerce aspect of TikTok, the app’s Shop Seller app has seen significant growth. Sensor Tower’s data shows a 230% increase in monthly active users for the app since the fourth quarter of 2022. However, this number still pales in comparison to TikTok’s active user base, currently at 1.4 billion in the first quarter of this year. Shop Seller has only around 6 million monthly active users.

Interestingly enough, TikTok’s main competitor, Instagram, may ultimately benefit from user frustration with the e-commerce aspect of TikTok. In January 2022, the app removed its own Shop tab and discontinued its live shopping feature in March of last year. This move could make Instagram more appealing to those who want to avoid direct calls to action to shop within the app.

Note: Insert appropriate tags for all the TikTok Shop mention.

This decision by Instagram was likely influenced by broader industry trends, which may not bode well for the future of TikTok Shop. During the pandemic, live shopping became increasingly popular, and e-commerce sales skyrocketed. However, as things returned to normal, it was found that social commerce, including live shopping, only made up about 5% of total e-commerce sales in the U.S. This suggests that American consumers may not be as inclined to shop directly from videos, although they are still heavily influenced by online trends.

Despite some users’ frustration with TikTok Shop, there is no significant evidence that it has prompted them to abandon the app in favor of Instagram Reels. Sensor Tower’s data shows that Instagram’s monthly active user growth has remained relatively consistent in the “mid-single digits” and has not been significantly impacted by the launch of TikTok Shop Seller.

Note: Add appropriate tags for all the data and data source mentions.

Additional data from Appfigures supports this finding and even suggests that TikTok’s revenue growth has not been as significant as its download rate. In the past year, downloads have either plateaued or decreased rather than increase, except in regions like the United States.

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Zara Khan

Zara Khan is a seasoned investigative journalist with a focus on social justice issues. She has won numerous awards for her groundbreaking reporting and has a reputation for fearlessly exposing wrongdoing.

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