Press "Enter" to skip to content

Beauty Investors and Executives on the Current State of TikTok Shop

TikTok is, once again, on a mission to shake up the beauty industry.

The platform has changed the landscape of the beauty business over the past few years in a number of ways: This is evident, of course, in the much-reported influx of tween skin-care shoppers and constant onslaught of emerging micro-trends. It’s also set to bring about a major consumer and retail shift via TikTok Shop, where beauty and wellness are leading categories, according to Nielsen.

The ByteDance-owned platform launched Shop in September 2023, offering users a TikTok-integrated commerce platform. It’s gunning for explosive growth, targeting $17.5 billion in merchandise volume for 2024, per Bloomberg. This presents beauty brands and investors with a new conundrum: Where does TikTok Shop fit in the ever-evolving puzzle of e-commerce? How much weight does it carry in developing and selling a brand? Do brick-and-mortar or direct-to-consumer still matter? And how much should brands be investing in TikTok with the looming threat of a ban on the platform in the U.S.?

“It’s a question we’re embarking on. In a lot of ways, I feel like I’m catching up, but the opportunity is so exciting,” Nyakio Grieco, co-founder of Thirteen Lune and Relevant: Your Skin Seen, tells Fashionista. To her, TikTok Shop’s biggest opportunity is in marketing: “I find that TikTok, as a platform, offers a level of authenticity because it’s not just about who you’re paying to speak about your products or launching big spend campaigns. People buy into people before they buy into a product.”

Tarte Cosmetics Founder and CEO Maureen Kelly feels similarly optimistic about TikTok Shop as a way to reach a wider audience. In fact, she is already hiring for new roles to manage the platform’s shopping component: “We’re treating TikTok Shop as its own retailer,” Kelly says. “Ninety-six percent of our TikTok Shop purchasers don’t follow Tarte’s TikTok account, so we can infer they’re new to the brand.” 

Part of Tarte’s current TikTok Shop strategy involves livestream shopping events (which is a major part of social shopping on the app) and curated product bundles featuring viral items. Social media-conscious formulas are another key part of the brand’s approach. This is why, for example, Tarte’s Tartelette XL Tubing Mascara washes off in tubes.

“On TikTok, you see people showing how you remove it in these tubes with warm water. It’s this very sensorial, aesthetically pleasing video that they can do in under 10 or 15 seconds,” Kelly says. “When I created this second gen of the [mascara], I made sure that those tubes had that visual effect because that is what customers want to see on TikTok.”

TikTok had already been a “game changer” since its early 2020 rise in tandem with the pandemic, per Oshiya Savur, beauty incubator Maesa’s chief brand and marketing officer. But the advent of TikTok Shop offers another turning point because “the algorithms are biased.” Since TikTok wants Shop to succeed, it’s currently “amplifying and supporting the brands” to its (albeit stagnating, per the WSJ) 170 million U.S. users. This boost can especially help newer and emerging brands reach new audiences.

“If you look at brands that are experiencing outsized growth, there seems to be a correlation with TikTok virality, a strong presence on TikTok and the emergence of TikTok Shop as well,” says True Beauty Ventures Co-Founder and Managing Partner Rich Gersten. Still, despite TikTok’s ability to help drive expansion, it remains important for beauty brands to have some sort of physical presence, he says. The industry is unique in this way, where a partnership with a mass retailer (like Sephora or Ulta) is crucial to success, as is a digital presence.

“Whereas other consumer categories may not have that obvious brick-and-mortar piece of their strategy, it’s incredibly important for us [in beauty]. We’ve made exceptions, but we almost never invest in a brand that hasn’t secured distribution in either Sephora or Ulta,” he adds.

Even with the need for retail partners, TikTok and its Shop feature have the potential to democratize and kickstart independent brands because “anyone can play,” as Kelly says. Grieco has been vocal about the “soul crushing” discrepancies in venture capital funding that women receive, especially by race. But TikTok and its Shop feature can potentially boost a brand to generate revenue, so that it can maintain and grow itself without tapping an outside investor or the well-lined pockets of family and friends. (At least, not as early on.)

“[Some] brands launch on TikTok before product is even made, and they’re able to generate the capital they need through pre-sales to get to their [direct-to-consumer] shelves. From an investor standpoint, it’s really important to pay attention to brands that are breaking through and doing it on their own,” Grieco says. 

Despite TikTok Shop’s buzzy launch and early promise, there’s one major question that looms: With the Chinese-owned social app facing a possible ban or forced shift to U.S.-based ownership (which China opposes), what does the future hold? Things remain iffy and unclear as the Senate prepares to vote on the bill next. This reflects the fast pace at which social media moves beauty — and the lagging pace of legislation in comparison — in Gersten’s view.

“What’s surprising is how this industry adapts and changes and moves so quickly: Today it’s TikTok. I don’t know what it’ll be four years from now, but odds are, it’s not TikTok, just like it’s not Instagram today,” Gersten notes. “If the U.S. government bans TikTok tomorrow, smart founders will find a new way to exploit the same thing on a different medium or channel.”

Larry Gaynor, the CEO and founder of TNG Worldwide, which has manufactured thousands of beauty products since 1985, agrees. He believes the perceived impending threat to most beauty businesses is “overblown” because they can move platforms and ask their communities to follow them, whether that’s on Instagram or newer apps like Flip. For Gaynor, “the tragedy of the TikTok ban is hurting and killing small entrepreneurial businesses” who are “all in on TikTok” and less able to replicate success on another platform.

TikTok Shop’s ambitious launch set the stage for another beauty industry shakeup, changing the way brands market and sell their products, or even get started. For founders like Kelly and Grieco, this feels like an opportunity for their established businesses and something that has the potential to, more broadly, democratize the industry by giving new brands a more level playing field. But as the app faces exile from the U.S., Shop may turn into a blip in its history, rallying brands and users to the next platform with its own algorithms and specific functionalities, once again.

Please note: Occasionally, we use affiliate links on our site. In no way does this affect our editorial decision-making.

Never miss the latest fashion industry news. Sign up for the Fashionista daily newsletter.


Be First to Comment

    Leave a Reply

    Your email address will not be published. Required fields are marked *