In what should be good news for small businesses, tech news site The Information reported that users are spending more money on TikTok. But not necessarily how you’d think.

In China, users purchasing products through TikTok (a Chinese-owned app) is common: The Chinese version of TikTok has seen wild success with in-stream e-commerce.  TikTokers in the United States are reportedly increasingly spending within the app too, but not on products—instead, they’re spending money on people.

According to the article, TikTok users sent over $250 million in “digital gifts” to livestreamers in the third quarter, with some creators earning significant income this way.

That’s great for creators hoping to make a living, but small businesses understandably hope users would spend more time (and money) with TikTok’s e-commerce capabilities. Still, businesses could ultimately benefit from users paying creators, since spending money at all on the app might get users comfortable with the idea of shopping in-stream, according to an article from Social Media Today.

Western audiences are far more reluctant to shop on social media platforms, but if any app is able to do it, it’s TikTok. Sharing products by word of mouth is ingrained in the app’s culture, so a logical next step would be to make popular items available at the click of a button, with users never having to leave the platform.

So what will it take for TikTok’s e-commerce to really take off? The fact that people are parting with their money, albeit for other people and not products, shows they’re not prohibitively concerned about cybersecurity and their financial information. And TikTok’s recent push to fulfill orders for businesses in a smooth and timely manner lends an allure for those wanting their products at the click of a button.

But until the app can prove it’s as trustworthy as retail websites, it has an uphill battle. Particularly in today’s economic state, do consumers really need their products now (as TikTok promises) or will they shop around for a sale or discount code (which favors traditional retail sites)? While it depends on the product and size of the business, the answer is more likely to be the latter. For small businesses seeking niche audiences, TikTok offers the opportunity to curate a cult following, and it isn’t a bad avenue to explore.

(Photo: Getty Images)

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