As regulatory scrutiny builds worldwide, the clock is Tik-Toking against social media giant TikTok. Hello Mother founder Jason Steel looks at the future of the TikTok ban on businesses.

In the last few months alone, more than half a dozen countries have imposed a ban of some kind on TikTok, swelling the ranks of TikTok-wary nations to include the European Union, India, New Zealand, Belgium, Denmark, Canada, the US and the UK. As Australia follows suit in barring the Chinese-owned platform from government devices, businesses are considering the impact of a TikTok ban on commerce. 

TikTok ban for businesses

Though it denies that it poses a security risk to  its users, it’s clear the TikTok brand is quickly losing its lustre thanks to the snowballing effect of bad press and government oversight. What does this spell for the thousands of businesses that have been propelled to stratospheric success via the highly addictive TikTok formula? 

With a billion-strong global audience and 7 million monthly users in Australia alone, TikTok dwarfs its competitors in terms of sheer numbers, engagement and time spent on the app. We’re talking an average of 95 minutes per day spent on the app, particularly among the desirable Gen Z and Gen Alpha demographics. So hypnotic is the FYP algorithm that ‘TikTok brain’, a phenomenon where the endless dopamine rush of short videos affects attention and concentration, has entered the general vernacular. 

The app’s audience is double that of Snapchat and Twitter and pulled in a whopping $4.6 billion in revenue in 2021. Revenue has no doubt increased even more after TikTok implemented its shopping integration with the backing of Shopify to create an ‘infinite loop’ that keeps shoppers in the platform instead of channelling them elsewhere to complete transactions. 

Here’s how it works: users encounter a product on TikTok, they purchase it, post about their purchase and spread the news to their family and friends. Data shows that about one in four users post about their new acquisition and one in five make a tutorial video for it. Even if they weren’t planning on buying anything, 67 percent of users say TikTok inspired them to shop, leading to the popular hashtag #TikTokMadeMeBuyIt which, incidentally, has amassed over 8.1 billion views this year.

Comprising a complex recommendation algorithm that now includes biometric data like facial recognition and voice prints, the ‘For You Page’ or FYP is the hub from which users can access hyper-personalised content that keeps them coming back. Modern machine learning techniques constantly evolve the platform’s capacity to deliver only the most scintillating and relevant content, moving at an impossible speed to pinpoint the next viral video.

For businesses, the siren call of TikTok presents an irresistible temptation, but not all are convinced TikTok alone is the answer to capturing the lucrative emerging Gen Z and Gen Alpha cohorts. 

Lessons learned with TikTok

The lessons present in the platform’s success are clear. The short video format works, but this doesn’t mean TikTok is needed to harness its power. Research by TikTok itself in conjunction with BCG shows consumers have reached a point of saturation for online advertising, are distrustful of branded content and consumed with decision-making paralysis. It proposes that ‘shoppertainment’, where entertainment is placed at the core of commerce, is a trillion dollar opportunity that is poised to take over growing shares of the global e-commerce market.

So how can businesses hedge against TikTok’s decline while capitalising on its powerful format to win a slice of the trillion dollar pie?

While the current format du jour is video, there’s a chance that Web 3.0 and VR technology will eventually overtake its popularity. Outside of TikTok there’s Instagram Reels, YouTube Shorts and countless other shoppable platforms vying for dominance. Apps that fall out of favour can become relevant again – just like LinkedIn for example. Brands operating with longevity in mind should remember that the needs of the next generation of consumers tend to evolve faster than technological developments; they should not overly invest in any one platform if they want to stay in the game. 

Brands should focus on replicating content across platforms while keeping an eye on emerging technologies. Having a uniform formula for engagement will help forge strong connections and make the transition across platforms easier. Some tips:

• Connect with audiences by honing your ‘brand personality’. This is what will cut through time and time again. Developing a brand personality allows for cohesiveness, a strong narrative and maximises the entertainment factor.
• Focus on educating and entertaining audiences – value is delivered through sharing useful information in a fun and relevant way. Use influencers, brand collaborations, live streaming and live events to create a buzz.
• Be ethical and authentic. An open and transparent attitude is what resonates with modern audiences. Gen Z and Millennials are values-based and businesses must make sure to highlight the causes they follow and their values if they want to stay on consumers’ radars.

• Encourage user generated content. UGC such as product reviews, unboxing videos or competition entries are great for community building and help start more conversations around the brand and its products.

TikTok has shown the world the effectiveness of entertaining and personalised content at capturing consumer attention. Even if it meets its eventual demise, these timeless lessons will long remain.