TikTok Ban On US Threatens Small Business And Influencer

Simply happened to be bisnys now facing great uncertainty after TikTok closed in the US (photo: x @hazan0608)

JAKARTA The closing of TikTok, which is expected to occur on Sunday January 19, poses a major threat to small, medium and influencer businesses that rely heavily on the short video platform for the sustainability of their business. Meanwhile, big brands are expected to switch to other platforms such as Instagram and YouTube.

TikTok, which is owned by ByteDance from China, has created a large economic ecosystem in the United States, generating billions of dollars from the sale of products such as candy, beauty products, clothing, and other consumer goods. However, this economy came under threat after the US Supreme Court on Friday 17 January passed a law banning the app on the basis of national security.

According to TikTok CEO Shou Zi Chew, as many as seven million businesses in the United States depend on this platform. In 2023, TikTok reportedly helped small and medium-sized businesses increase their sales to 14.7 billion US dollars (Rp. 240.7 trillion). However, with the threat of this ban, businesses like Mama V's Candy and Simplydias are now facing huge uncertainty.

Valerie Verzwyvelt, owner of Pineville-based Mama V's Candy, Louisiana, revealed that her business has experienced a surge in sales since joining TikTok Shop. In 2024, the company made USD 6 million selling nearly 300,000 sour candy products that went viral on the platform.

"We are in the second expansion stage, but now I have to rebuild this business," said Verzwyvelt.

This was similar expressed bytensive Greany, owner of Simply stuffys, an independent beauty brand in California. TikTok became their main marketing and sales channel, earning more than $20 million by 2024. However, with 95% sales originating from TikTok, this ban could sudden discontinue their operations.

Impact On Influencers And Digital Economy

In addition to small businesses, TikTok influencers also face major blows. This platform has become a major source of income for many creators through sponsors, affiliate commissions, and direct payments from TikTok. An influencer with 10,000 to 100,000 followers can generate about 2.000 US dollars per brand campaign, according to influencer marketing agent Billo.

However, some influencers and businesses are trying to capitalize on this moment to spend their stock before the ban takes effect. "Many TikTok stores are making massive discounts on their products in preparation for the ban," a user told 65,000 of his followers.

Meanwhile, reports from Oxford Economics predict that small and medium-sized business activities on TikTok will account for $ 24.2 billion for US GDP by 2023, and support 224,000 jobs.

Some businesses have prepared backup plans to switch to other platforms such as Instagram and YouTube. Front Row, an e-commerce consultant, stated that most of its clients, including major brands such as Sephora and Ouai, have been preparing themselves since the threat of this ban began to emerge in April 2024.

"We follow our community. If they turn to other platforms in the future, we will be with them," said Kory Marchistot, Chief Marketing Officer at e.l.f. Beauty.

Changes In Social Media Landscape

The closure of TikTok in the US can change the landscape of social media, especially in the beauty and lifestyle industry. Mitchell Halliday, founder of British beauty brand Made By Mitchell, called TikTok the center of today's beauty trends.

"TikTok is the center of the beauty world now. Previously it was YouTube, then Instagram, and now TikTok," said Halliday, which recorded a record sales of 1 million US dollars (Rp. 16.3 billion) in one day on TikTok Shop in 2022.

The future of TikTok in the United States now depends on the government's decision and its small business adaptation as well as affected influencers.