TikTok Shop is selling fmcg products “cheaper than we can ever sell it” to attract users to the burgeoning platform, a challenger brand co-founder has revealed.
Fitness influencer James Smith, co-founder of beverage and supplement startup Neutonic, alerted his followers to a 28% discount being applied to multipacks of Neutonic’s Productivity Drink on TikTok Shop this month.
“They want to acquire new people to TikTok Shop, this means they’re willing to take a loss to acquire a customer,” he posted.
The social media platform’s approach to user acquisition means shoppers could get the drink for “a literal steal” while TikTok “pays the difference” he said.
“Fill your boots…TikTok is paying,” Smith added.
It is understood such promotions are always co-funded by both the brand and TikTok. To attract TikTok’s own additional discounting, sellers must fund a minimum discount requirement, with the additional discount from the platform “applied dynamically on top”. The brand must also opt in to participate in sales events such as the recent TikTok Shop January Sale.
Experts report seeing the tactic of heavy discounting on the platform being used “more frequently in the UK as TikTok Shop aggressively accelerates adoption”.
“These platform-funded discounts are typically reserved for brands that already demonstrate strong conversion rates, clean operational performance, low refund risk, and solid creator/affiliate traction,” explained TikTok Shop strategist at Ebusiness Guru, Sidhant Mishra. “In other words, where TikTok has high confidence the subsidy will convert net-new buyers into repeat customers.”
As to how brands can secure such backing, Mishra added it is “still selectively deployed rather than universal”.
“It’s less about random promotion and more about backing brands that can help drive long-term ecosystem growth. It’s ultimately a data-led decision based on their algorithms,” he said.
TikTok Shop was launched in the UK in 2021, allowing users to “transition from product discovery to purchase in just seconds”, TikTok said. There are now over 200,000 UK sellers on TikTok Shop in the UK, according to the platform, and more than 6,000 Live shopping sessions hosted locally each day.
The majority of sellers are small and medium-sized businesses, but several larger fmcg brands are using it to sell products directly to users, among them Nivea, Britvic, Andrex and L’Oréal. Asda, Lidl and Sainsbury’s have also sold via the channel.
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