TikTok + Shopify: new fertile ground for counterfeiters

Remember when the biggest concern with TikTok was that it was based in China? Well, the news of TikTok’s recent partnership may be a bigger concern keeping you up at night.

This statement shouldn’t surprise anyone but we are a society driven by Social Media – how many likes, followers, shares, retweets, etc. did our last post accumulate? The coronavirus has completely changed how we interact with people. Social/Physical distancing, home quarantines have fueled the innate human need to socially connect and TikTok has become one of the outlets during this unprecedented time.

Those of you with tweens/teens/twenty+ year olds probably already know TikTok is one of the fastest growing social media platforms in the world where users create and promote short lip-sync videos with music.

Others may be more familiar with TikTok because of the highly publicized political concern that TikTok is owned by a Chinese based company which potentially poses a national security risk to user’s data. The U.S. government announced back in July the app would be banned in the U.S. if ByteDance (TikTok Chinese owner) didn’t sell TikTok to a U.S. buyer. The deadline for a sale was November 13 but has since been extended another 15 days.

In late October 2020, TikTok announced a global partnership with e-commerce platform Shopify which will allow the 1 million+ merchants on Shopify’s commerce platform to tap into a new revenue stream by targeting TikTok’s 800 million global users. Shopify merchants will be able to push In-Feed shoppable video ads directly within Shopify. The partnership will eventually expand to include other in-app shopping features.

This partnership allows merchants to target a TikTok audience of 100 million in the US as of August 2020 and 40% of that audience is between the ages of 18-24. Gen Z has the buying power of over $140 billion which makes TikTok an app prime for consumer spending. This opens up a new avenue of influencer marketing risks for brand owners.

• TikTok is built on influencers but what happens if that influencer is knowingly or unknowingly promoting a counterfeit product? Recently Amazon sued TikTok and Instagram influencers for allegedly selling fake luxury goods.
• With an audience of teens and youngsters, nefarious targeted ads and the ability to purchase potentially harmful health-related products (nutraceuticals, vaping paraphernalia) directly in the app could expose youth buyers to items they may not have direct exposure to. Merchants can determine what product they would like to feature, and video ads are automatically generated that direct the user to the merchants’ Shopify stores for purchase.

As a Brand Holder should you be concerned with the news of this new partnership? I think it depends on the current Brand Protection strategy your organization has in place. Do you currently have an issue with counterfeit product? Are you actively or passively protecting your physical product both offline and online? Is your product popular with social media influencers and highlighted in their posts? If you answered yes to any of those questions, you should make sure to stay on top of social media trends and make adjust your brand protection strategy that to include monitoring of your brand on Shopify and and popular social sites.

No question that this partnership represents a huge opportunity for brands to sell through these channels to Gen Z. However, more needs to be done to ensure that TikTok doesn’t become a hotbed for fake products.

Combatting counterfeiting needs to be a combined effort between vigilant shoppers, brands and online platforms. It is in the best interests of brands and online platforms to ensure they have the right policies and procedures in place to protect users, and in effect safeguard their own reputation and revenue stream.