TikTok Growth Decelerates Amidst Introduction of TikTok Shop

TikTok placed sixth in terms of MAUs, and new figures show that its growth has slowed.

While TikTok dominated app downloads and consumer spending in 2023, Facebook, including Meta-owned apps like WhatsApp, Instagram, and Messenger, maintained its top position by monthly active users (MAUs). TikTok ranked fifth by MAUs, and new data indicates a deceleration in its growth.

Sensor Tower’s data reveals that TikTok’s growth, though still positive, has slowed down. In 2022, TikTok’s MAUs grew by an average of 12% year-over-year per quarter, but in 2023, this figure decreased to 3% year-over-year per quarter.

Introduction of TikTok Shop and Impact on User Experience:

TikTok’s move into e-commerce via TikTok Shop, which was launched officially in September 2023, is considered a potential factor in the slowdown of growth. 

TikTok Shop aims to translate the influence of TikTok videos into real-world sales. However, users have expressed frustration, complaining that the app has become an “ad-filled wasteland” and a “dystopian” space due to TikTok Shop’s influence.

Seller Complaints and User Annoyance:

Sellers on TikTok Shop have embraced the platform, leading to complaints about the app’s transformation into a space filled with ads. 

Users have expressed annoyance at the abundance of videos promoting products and trying to drive sales, impacting the overall user experience on TikTok.

Despite user complaints, the Shop Seller app, powering TikTok’s e-commerce initiative, has experienced “robust” growth since Q4 2022, rising 230% year-over-year as of Q4 2023. 

However, Shop Seller’s active user base remains small, with around 6 million monthly active users compared to TikTok’s 1.4 billion.

Potential Impact on Instagram:

Instagram could potentially benefit from user frustration with TikTok Shop. After Meta-owned Instagram removed its Shop tab and live shopping features in 2022, it may appeal to users seeking a less commerce-focused experience. 

Instagram’s monthly active user growth has remained consistent, and TikTok Shop’s impact doesn’t seem to have significantly affected Instagram Reels.

Industry Trends and Implications:

The broader industry trend shows that social commerce, including live shopping, contributed only about 5% of total e-commerce sales in the U.S. as of 2022. This suggests that U.S. consumers may be less inclined to shop directly from videos. 

Despite TikTok’s growth slowdown, users have not abandoned the app for Instagram Reels, and Instagram’s user base has not been significantly impacted. TikTok’s revenue growth continues, but its downloads have declined for over a year.

James Adam

James Adam, a noted business writer for CEO Times Magazine, specializes in insightful industry analysis and executive profiles. Known for his clear, concise style, James offers readers an expert perspective on global business trends and market dynamics.

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