TikTok, the social media platform known for its short-form videos and dance trends, has been making waves in the e-commerce world with its rapidly growing gross merchandise value (GMV). In this blog post, we'll explore what GMV is, how TikTok is driving it, and what this means for the future of social commerce.

First, let's define GMV. Gross merchandise value is the total value of goods sold on a platform during a certain time period. This includes the price of the item, as well as any fees or taxes associated with the sale. In other words, it's the total revenue generated by a platform's e-commerce activity.

TikTok has been steadily increasing its GMV over the past year, with a reported $26 billion in GMV in 2021. This is largely due to the platform's emphasis on social commerce, which allows users to shop directly from TikTok videos. Brands can create their own storefronts within the app, and users can easily purchase products with just a few taps.

One of the key drivers of TikTok's GMV is its algorithm, which is known for its ability to quickly surface popular content to a wide audience. This means that even small brands and creators can quickly gain exposure and drive sales. TikTok also offers a variety of advertising and promotional tools, such as shoppable ads and hashtag challenges, that make it easy for brands to drive conversions.

Another factor contributing to TikTok's GMV growth is its popularity with younger generations. Gen Z and millennials are among the most active users on the platform, and they're also the most likely to make purchases through social media. This means that brands targeting these demographics have a prime opportunity to drive sales on TikTok.

So what does this all mean for the future of social commerce? It's clear that TikTok is well-positioned to become a major player in the e-commerce space. With its large and engaged user base, powerful algorithm, and robust advertising tools, it's easy to see why so many brands are flocking to the platform. And as more and more consumers become comfortable with making purchases through social media, we can expect to see even more growth in TikTok's GMV.

Of course, TikTok isn't the only platform investing in social commerce. Instagram, Facebook, and Pinterest are all making moves to capitalize on this growing trend. Overall, TikTok's GMV growth is a testament to the platform's power and potential as a commerce platform. As the platform continues to evolve and expand its e-commerce features, we can expect to see even more growth in the years to come.

We are also proud to announce that we rank #2 on TikTok shop by monthly total number of lives and #2 by monthly total GMV in the UK in March 2023 among all agencies. If you’re interested in expanding your business in the UK through TikTok shop, we’re here for you!