Have you ever heard the term “TikTok brain”? Tiktok videos, reels, and other short formats are killing our attention span, and there is now a name for this phenomenon. In fact, nearly 50% of users surveyed by TikTok said that videos longer than a minute long were “stressful”. ONE minute is stressful now?! In addition to shrinking our attention spans, short videos are highly addictive, with the average TikTok user spending a whopping 95 minutes a day on the app. With this data in mind, it is no surprise that the recent TikTok ecommerce venture, TikTok Shops, is successful. But this success might be short-lived in some countries, with Indonesia very recently banning shopping transactions on social media apps.
The Psychology of TikTok Shops Purchases
Let’s first analyze the mechanics behind TikTok shops purchases. Typically, there are two big types of purchases: emotionally driven and rationally driven. Emotionally driven purchases is when you walk by a bakery, you see a delicious slice of chocolate cake in the window, and get in the store to buy it. You don’t ask for the full ingredients list, you don’t compare prices with other nearby bakeries, you don’t call your uncle for advice on the chocolate cake market. Instead, you get in line, spend a little money, and leave the bakery within minutes, ]your slice of cake in hand.
On the other hand, rationally driven purchases involve more thoughts and research. When buying a car or expensive power tools, consumers invest more time to compare their options. While you are unlikely to buy a car off TikTok shops, a sweater or skincare item may be a lot more tempting. Consumers are exposed to hundreds of short, exciting videos, and it can be difficult to resist making these impulsive, emotionally driven purchases. TikTok shops have remarkably reduced some of the friction previously involved with social commerce, enabling users to make purchases without even leaving the app.
The Impact on TikTok and how Friction Affects Sales
Indonesia recently decided to ban shopping transactions directly made within the app. Sellers can still promote products, and direct consumers to alternative platforms to make the purchase. This does not sound like a big deal, but believe me, it is. Over the years, ecommerce platforms are making tremendous efforts to make the purchasing processes as easy as possible. The emergence of One-click purchase buttons (such as the Amazon “Buy Now” button), streamlined checkout processes or saved payment methods contributed to a smoother, faster purchase experience.
The idea that customers now have to login to a different platform, and potentially go through a typical checkout process (maybe even creating an account in some cases) is a disaster for TikTok and its 3rd party sellers. When mostly dealing with impulsive purchases, time and efforts required work against the seller. The greater the friction during the purchasing process, the lower the conversion rate. It is no surprise that TikTok is pushing back against these new regulations. The Chinese platform, as well as other industry experts, argues that banning social commerce and in-app purchases will stifle innovation and impact millions of sellers.
The Controversy of Regulating Ecommerce Innovation
TikTok has very ambitious plans with its TikTok shops feature, not only with Indonesia’s young population and its 100 millions users, but in other countries as well. I believe that other countries are closely watching what is happening in Indonesia, and these new regulations can potentially throw a wrench in TikTok’s plans. My personal views on the subject are conflicted. The laser-targeted For You page and past paced content can be seen as predatory. Many young consumers are already struggling with social media addiction, the addition of frictionless purchasing options can be detrimental to their mental and financial health. On the other hand, the TikTok model represents a massive innovation in the ecommerce field, and a good opportunity for people to discover new products and hear video testimonials from the community.
Regulating innovation can be controversial and a difficult issue. Now that a large country, and strategic region for TikTok, has taken action, it will be very interesting to see how other nations will react, and what will be ecommerce giants’ response.