Despite being the most downloaded and top-grossing app globally in 2023, TikTok’s actual usage lags behind Facebook and Meta-owned apps, leading to concerns about its growth slowdown. New data from Sensor Tower indicates a deceleration in TikTok’s monthly active user growth, dropping from an average of 12% YoY per quarter in 2022 to 3% in 2023. This slowdown coincides with the launch of TikTok Shop in the U.S., an e-commerce feature introduced officially in September 2023.
TikTok Shop, initiated through tests in November 2022, attracted brands like PacSun, Revolve, and KimChi Chic. While aiming to translate TikTok video influence into real-world sales, it has prompted criticism. Users complain about the app becoming an “ad-filled wasteland,” and Redditors debate whether TikTok Shop has negatively impacted the platform. Complaints range from excessive promotion videos to frustration with ads interrupting the user experience.
Despite these criticisms, Sensor Tower reports robust growth for TikTok’s Shop Seller app, powering its e-commerce initiative. The app witnessed a 230% YoY increase as of Q4 2023, albeit with only around 6 million monthly active users compared to TikTok’s 1.4 billion. Instagram, having removed its Shop tab in January 2023, might benefit from user frustration with TikTok Shop. However, Sensor Tower suggests Instagram’s user growth hasn’t significantly changed since TikTok Shop’s launch.
While TikTok’s revenue continues to grow, Appfigures notes stagnant or declining downloads over the past year. This trend prompts questions about the long-term success of TikTok Shop, particularly as live shopping’s impact on e-commerce sales appears limited in the U.S., comprising only around 5% of total e-commerce sales in 2022. Despite concerns, users have not abandoned TikTok for Instagram Reels, suggesting a nuanced reaction to TikTok Shop’s presence.
