Six months after its launch, TikTok Shop has sold more than $1 billion worth of products, some of which have quality issues, including counterfeits.
go through Cyrus FarivarForbes Staff
SecondEarlier this week, a woman named “Tokyo” went live on TikTok, standing in front of a giant, anatomically correct mouth in front of more than 100 viewers watching her live. “Helps your gums stay healthy and helps you get fresher breath! This can brighten and whiten your smile by two and a half shades!”
She hawks a $7.49 mouthwash alternative called “Oil Pulling,” which is currently the best-selling item on the TikTok store. According to TikTok, the oil, produced by her employer GuruNanda Company, has sold more than 1.5 million copies through the TikTok e-commerce section and has generated sales of more than $11 million since the TikTok Shop launched in the United States in September 2023. data. Every time a customer places an order, a silver bell rings in Tokyo.
According to the American Dental Association, consumers should swish tooth extraction oil around their mouth twice a day for 2 to 10 minutes each time, but it has not been proven to have medical benefits. GuruNanda’s website explicitly states that it does not eliminate cavities or reverse periodontal disease—a frequent claim by influencers marketing the product.
Best-selling items on the TikTok store
Vendors have even made millions selling supplements and possibly counterfeit headphones.
TikTok declined to respond Forbes Questions about the efficacy of GuruNanda products and other queries.
In the first six months of TikTok Shop, the new online retail platform was flooded with cheap and sometimes knockoff products that were more likely to be found at dollar stores than mainstream retailers. For example, a $5.35 “car air freshener” with scents such as “Barber Shop” and “Fruit Cereal” has sold more than 729,000 units. The $18 “Surprise 3D Dragon Egg” has sold more than 150,000 units.
“If I knew the exact reason and formula, I would do [these videos] Every day of my life. ”
According to sales data from analytics firm YipItData, TikTok Shop’s estimated annual revenue is close to around $4 billion. That would make it about the same size as Abercrombie & Fitch, which had $4.28 billion in revenue last year.
The most successful products on TikTok Shop are usually clothing, beauty, or health-related products. A $25 bottle of 60 “multi-mineral seaweed” capsules has been sold more than 205,000 times; a $14 “combing hair brush” has been sold more than 853,000 times. But best of all, they’re cheap. Two Brooklyn brothers made more than $1 million in just five months selling homemade lemon-turmeric soap ($4.50 plus shipping). “We worked from 4 a.m. to midnight,” Rusty Fields, 25, told us Forbes.
Even the founder of uber-popular oil-pulling maker GuruNanda isn’t sure why a product his company has been selling in regular drugstores for years is so popular on TikTok. “If I knew the exact reason and formula, I would do [these videos] Every day of my life,” Puneet Nanda, who was recently appointed spokesperson for TikTok Shop, told Forbes.
Virality is built into the app itself, but TikTok Shop also incentivizes other creators to peddle the appeal of successful products themselves in exchange for a commission on each sale. This in turn promotes virality. “This is a more democratic, chaotic reimagining of QVC,” Dan Frommer, a retail analyst and publisher of The New Consumer, wrote in a recent newsletter.
For some consumers, this popularity is proof of quality. “[GuruNanda] is one of the best-selling products on the TikTok store, so I think it’s a good product,” Dillon Latham, a 19-year-old TikTok user in Virginia, told Forbes. He said he earned more than $3,000 in commissions by promoting GuruNanda products.
But inconsistency makes the platform less attractive to larger companies. “This is scary for ordinary brands because these cannot be replicated,” said Juozas Kaziukėnas, CEO of independent e-commerce analytics firm Marketplace Pulse. Forbes. “It’s like replicating user-generated content, there’s no formula – but when it works, it works perfectly.”
“Chinese companies no longer just make our fast-selling, cheap products; they also make our products.” They are also promoted to businessmen quickly and efficiently. ”
Even worse: there are tons of counterfeit products out there. You can buy a fake Apple Watch for just $6 (more than 253,000 units sold), or a $23 set of Lenovo Thinkplus X15 wireless headphones (more than 233,000 units sold), which the company doesn’t sell in the U.S. ( “It could be a gray market import or a fake, but we can’t tell just from the image/link,” said Lenovo spokesperson Wendy Fung. Forbes through email.Apple did not respond Forbes Comments requested. )
TikTok spokesperson Laura Perez said Forbes In an email, the company “constantly implements[s] Strictly crack down on counterfeit products, investment[s] Conduct extensive testing and reporting and provide[s] Brand Intellectual Property Protection Center. “
eMarketer analyst Jasmine Enberg said larger companies are “more wary of TikTok Shop because of the risks of the platform and concerns about counterfeit products.” Forbes. Some American brands have struggled to gain traction: Estée Lauder’s Double Wear foundation ($49), for example, sold just over 100 units.
This could spell trouble for TikTok’s e-commerce ambitions if it wants to compete with Amazon, the true online retail giant.The company reportedly aims to reach $17.5 billion in U.S. sales by 2024 Bloomberg. But for now, it appears more focused on competing for the same market as two Chinese e-commerce rivals, Shein and Temu, which have grown rapidly by selling low-price clothing, homewares and other bargains.
“Temu is already the size of Shein a year ago, and TikTok Shop is the size of Temu a year ago,” Frommer wrote in the same newsletter. “Chinese companies no longer just make our fast-selling, cheap products; they also make our products.” They are also promoted to businessmen quickly and efficiently. “
Still, some of TikTok Shop’s early growth has begun to slow. According to YipItData, TikTok Shop’s revenue increased from $261 million in October 2023 to $349 million in December 2023, the most recent month for which data is available. However, between January and February 2024, TikTok Shop sales were flat.
Another challenge to its growth is rising seller fees. On April 1, TikTok increased its referral fee (a commission charged on specific sales) from 2% to 6%, and plans to increase it again to 8% on July 1.
Even the most successful story, TikTok Shop, has had its share of headaches.
Nanda said live streaming loses money considering the cost of setting up a set of equipment, not to mention the time lost in taking employees away from their day jobs, including some reception among other administrative duties. Plus, he said, speaking in front of a camera for hours without a break is exhausting.
“They’re not happy to do it,” he told Forbes last month. “We shuffled three guys in the last five days.”
But the head of GuruNanda believes he has no choice if he wants to continue to capitalize on TikTok’s viral cycle and stop fakers of his own: “There are too many scammers out there,” he said, peddling copycat versions of his oil-pulling products Version.
“What they say is, ‘This is a real product,’ and they associate false products with it,” he said. “We get to live our lives so we own this space and not let others cheat for us.”
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