The Rise of In-App Commerce: How Meta + TikTok are Shifting Online Shopping

Facebook, Instagram, and TikTok don’t want you leaving their platforms to complete your purchases anymore.

The three social networks have added native storefronts and checkout features in recent years, but according to Marketplace Pulse, in-app checkouts remain rare.

This week, TikTok announced that it’s shutting down its Storefront feature, which — as Social Media Today explains — “enables merchants to connect their third-party shopping process into the TikTok UI, facilitating a more direct purchase flow in-app.”

In a post titled “FAQs for Storefront Sunset,” TikTok wrote that “your Storefront products will no longer be visible on your TikTok profile, or be eligible for inclusion in short videos, LIVEs and ads. You will also lose access to your Storefront on Store Manager. It’s important to migrate from your Storefront to TikTok Shop as soon as possible.”

“Facebook, Instagram, and TikTok do not want to drive traffic to Amazon. They want to be Amazon.”

-JUOZAS KAZIUKĖNAS, MARKETPLACE PULSE FOUNDER

In-app shopping is TikTok’s key revenue stream in China via Douyin, the local version of the app. But in the U.S., the TikTok Shop is on track to lose more than $500 million this year, according to The Information.

In April, Meta announced that U.S. Shops will be required to use Facebook’s checkout rather than diverting people to a separate e-commerce website. Shops that don’t comply will no longer be accessible as of April 24, 2024, and earlier this month, the company fully stopped onboarding new Shops without in-app checkout enabled.

Meta cushioned the blow with a promise to expand “access to AI-powered shop ads to improve campaign performance.”

As Marketplace Pulse points out, in-app commerce has disadvantages for brands and merchants. Namely, they’ll get far less customer data.

Other news

• Selena Gomez’s makeup brand, Rare Beauty, partnered with Hulu’s “Only Murders in the Building,” in which she stars.
• Inflation is falling, earnings are rising, and consumer confidence is regaining momentum. That’s good news for advertisers. 
• According to Marketing Dive , “Gen Z is more likely to be OK with targeted ads.”
• And Pepsi is celebrating 125 years in business this Monday with 125 days of promotions. 

That’s all for this week’s Marketing Roundup. Check back in next Friday for more news. And subscribe to our newsletter below for additional updates.