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The TikTok effect: Businesses and creators stand to lose on ban

The TikTok effect: Businesses and creators stand to lose on ban
The TikTok effect: Businesses and creators stand to lose on ban

A sense of unease ripples through the creator economy after the United States House of Representatives passed a bill banning TikTok nationwide. 

Describing Tiktok as “a surveillance tool,” the House Republican Conference says it would “put an end to Communist China’s influence [by] bringing the bipartisan Protecting Americans from Foreign Adversary Controlled Applications Act to the floor, which will protect Americans and prevent foreign adversaries … from targeting, surveilling, and manipulating the American people.” 

In a fearmongering statement, House GOP says: “Imagine that you woke up one morning and discovered that Communist China had distributed 170 million sensors across the United States. As it turns out, such a surveillance network already exists: It’s called TikTok.”

We have just seen that TikTok has made a massive financial contribution to the US economy. Surely, this money will be of good use to the federal government to ensure it is allocated to much-needed areas of the country.  

The ban could have a massive effect on the bank balance of many businesses. In a world where e-commerce is at an all-time high, a company may be forced to close its shop if a ban is imposed. 

Contribution to the US economy 

Earlier this month, TikTok issued a press release detailing the findings of the Oxford Economics report. The report states the company contributed $US 24.2 billion to the US’s gross domestic product (GDP) in 2023. This is a significant amount of money in the government’s purse. 

Oxford Economics says: “TikTok serves as a hub for a diverse array of individuals and businesses across the United States, contributing to a vibrant online community. Among these, small and midsize businesses (SMBs) are well positioned to benefit from TikTok’s algorithm, which helps users discover niche brands that align with their preferences. 

It adds that with more than seven million businesses among its 170 million active users in the US, individuals can explore new products, services, and local attractions, thereby influencing real-world communities. “These interactions support economic value across different industries, which this report aims to quantify.” 

The report gives some key findings. In 2023, SMBs on TikTok supported 224,000 jobs and contributed $5.3 billion in taxes. TikTok’s U.S. operations also added $8.5 billion to the GDP and $2 billion in taxes, and 59,000 jobs nationwide.

TikTok CEO responds to the ban

TikTok CEO Shou Zi Chew took to the platform to address the ban, thanking Tiktokers for making the app “so special.” He says TikTok has “over the years invested to keep the platform safe.” 

According to Shou, the ban “will take billions of dollars out of the pockets of creators and small businesses. It will risk more than 300,000 American jobs and take away your TikTok.

“TikTok has given 170 million users a platform to freely express themselves and has empowered more than 7 million businesses in the United States. From small business owners who rely on TikTok to make ends meet, to the teachers who inspire millions of students to learn, to everyone who finds joy on TikTok.”

“We believe we can overcome this together. I encourage you to keep sharing your stories. Share them with your friends, share them with your family, share them with your senators.” 

Impact on creators

Speaking to content and creative strategist Jenn Vande Zande, the 27-year-old actor and comedian Giana Carli says it “would really not be great to lose the thousands of dollars” she makes on TikTok. Thanks to her following of 272,000 (as of 22 March), Carli can settle her monthly rent. 

Meanwhile, NotSophieSilva brings this humorous twist to the conversation:


United States, BFFR. Why is banning tiktok your greatest concern?? We got WAY BIGGER ISSUES. Please comment your thoughts! – #tiktokban #tiktoknews #usbanningtiktok #freedomofspeech

♬ original sound – soph

Lauren Ramos – known as RatedLaur to her 571,700 followers with 23.9 million accumulated likes – says the TikTok ban highlights how “embarrassing it is to be an American right now.” 

Referring to the House of Representatives as a “bunch of expired retirement home patients,” she says the hypocrisy is shocking. When “homelessness rates are going up and people can’t afford to feed their families,” the representatives are silent but are quick to unite over an app. 

“Massive genocides, they’re like, ‘okay, that’s a tomorrow problem.’ But they can push this s*** through faster than EDP went to the donut shop. … And my favorite thing in the entire big wide world is when Boomers are like, ‘China is stealing all your information,’ as if freaking Meta, the number one information stealer out there, is keeping them safe or something.”

Impact on e-commerce sector

It’s not just content creators who would feel the brunt of the TikTok ban. TikTok has become a sales platform used by millions of individual e-commerce sellers and Fortune 500 companies alike.

Sensor Tower data for the third quarter of 2022 reveals that brands reportedly spent over $11 billion advertising on TikTok in 2022. Amazon, Google, Disney, Hulu, and Samsung were cited as the top five advertisers. 

TikTok also broke another record when it became the first non-gaming app to reach $10 billion in consumer spending, with an additional $3.8 billion generated throughout 2023. 

ALSO READ: TikTok’s e-commerce surge: $10bn milestone and $1.5bn investment

Impact on businesses 

In October, TikTok took on the complicated task of managing inventory and delivery from various independent merchants who sell goods to TikTok followers, setting up fulfillment warehouses. 

Here’s a scenario: A merchant selling goods to TikTok has thrived since this initiative was launched. 

The business has been able to employ more staff because business revenue is booming. The company has created job opportunities for people and is capturing the market quickly. The company has streamlined its processes and invested revenue in other departments. Let’s say this merchant has generated $US 500,000 in revenue since TikTok started this logistics mission. 

What’s at stake here? The merchant will lose much-needed revenue and may have to cut back on staff. The merchant who was once an industry trailblazer is now in hot water – the ban will hit hard. 

It’s not just SMBs that will be affected. Business Insider highlights what the ban could mean for companies like Apple and Tesla. In the report, Gene Munster, a managing partner at Deepwater Asset Management, told the publication that Apple and Tesla could lose the most in terms of total dollars. 

NOW READ: Unpacking TikTok’s e-commerce guide for small businesses

About the author

Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.

Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.

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