JAKARTA The shutdown of TikTok, which is expected to occur on Sunday, January 19, poses a major threat to small, medium-sized businesses and influencers who rely heavily on the short video platform for the sustainability of their businesses. Meanwhile, big brands are expected to migrate to other platforms such as Instagram and YouTube.
TikTok, owned by China’s ByteDance, has created a large economic ecosystem in the United States, generating billions of dollars from the sale of products such as candy, beauty products, clothing and other consumer goods. However, this economy was threatened after the United States Supreme Court approved a law on Friday, January 17, prohibiting the application for reasons of national security.
According to TikTok CEO Shou Zi Chew, up to seven million businesses in the United States depend on this platform. In 2023, TikTok reportedly helped small and medium-sized businesses increase their sales to 14.7 billion US dollars (240.7 trillion rupees). However, with the threat of this ban, companies like Mama V’s Candy and Simplydias are now facing enormous uncertainty.
Valerie Verzwyvelt, owner of Pineville-based Mama V’s Candy, Louisiana, revealed that her business has seen an increase in sales since joining TikTok Shop. In 2024, the company earned $6 million by selling almost 300,000 sour candy products that went viral on the platform.
“We are in the second stage of expansion, but now I have to rebuild this business,” Verzwyvelt said.
So said the uptight Greany, owner of Simply Stuffys, an independent beauty brand in California. TikTok became its main marketing and sales channel, earning over $20 million by 2024. However, with 95% of sales originating from TikTok, this ban could suddenly disrupt its operations.
Impact on influencers and the digital economy
In addition to small businesses, TikTok influencers are also facing big hits. This platform has become an important source of income for many creators through sponsorships, affiliate commissions, and direct payments from TikTok. An influencer with between 10,000 and 100,000 followers can generate around US$2,000 per brand campaign, according to influencer marketing agent Billo.
However, some influencers and companies are trying to take advantage of this moment to spend their shares before the ban takes effect. “Many TikTok stores are heavily discounting their products in preparation for the ban,” one user told 65,000 of his followers.
Meanwhile, reports from Oxford Economics predict that small and medium-sized business activities on TikTok will account for $24.2 billion of US GDP by 2023 and support 224,000 jobs.
Some companies have prepared backup plans to switch to other platforms such as Instagram and YouTube. E-commerce consultancy Front Row said most of its clients, including big brands like Sephora and Ouai, have been preparing since the threat of this ban began to emerge in April 2024.
“We follow our community. If they turn to other platforms in the future, we will be with them,” said Kory Marchistot, chief marketing officer at elf Beauty.
Changes in the social media landscape
The shutdown of TikTok in the US may change the social media landscape, especially in the beauty and lifestyle industry. Mitchell Halliday, founder of British beauty brand Made By Mitchell, called TikTok the center of current beauty trends.
“TikTok is now the center of the beauty world. Before it was YouTube, then Instagram and now TikTok,” said Halliday, who recorded record sales of US$1 million (Rs 16.3 billion) in one day on TikTok Shop in 2022 .
The future of TikTok in the United States now depends on the government’s decision and its adaptation to the small businesses and influencers affected.
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