Last Wednesday (April 24), the US Senate passed a bill to ban the popular social media app TikTok. Hours later, President Joe Biden signed the bill into law. This law requires ByteDance, the parent company of TikTok, to sell the app to a company or individual outside of China, i.e. in another country. Or TikTok should be shut down in the US. TikTok, however, has announced a legal battle challenging the law.
By next year, many die-hard fans of social media platforms in the United States may lose one of their favorite pastimes. But without TikTok, the most affected will be the content creators of TikTok and the small businesses that earn money using this medium.
As of March 2024, more than 7 million US small businesses use TikTok. TikTok says it will generate $15 billion in revenue for these business ventures in 2023.
TikTok has become one of the global economic powerhouses today. According to TikTok's report, small and medium-sized enterprises built using the platform contribute 4.8 billion euros or 5.14 USD to the GDP of Germany, France, Italy, the Netherlands and Belgium.
US entrepreneurs fear a drop in their income due to fears of TikTok shutdown. Similarly, global businesses also target US consumers in product marketing. The US audience is also a top target for content creators. Small and medium businesses and content creators who rely on social media platforms worldwide are therefore worried. Finding an alternative to TikTok is a big challenge for them now.
Finding a growing audience and consumer
27-year-old Shira is a full-time content creator on TikTok. He has more than five lakh followers on TikTok. He opened a TikTok account in 2021 after moving to the United States from Australia. Initially he used to create reaction videos on other content. He also made content about his experience living in the United States. Within nine months, his number of followers grew exponentially.
Shira relies on TikTok partnerships for revenue. He also has accounts on Snapchat and YouTube, but according to him, the platform that consistently earns the most is TikTok. He told the BBC, "It took me a few years to build a truly dedicated audience on TikTok. I have done a lot of live streams, I have given a lot of content. The journey to making money from TikTok has been tough. But now I'm really grateful for where I'm at.
Shira described the ban as devastating. Outside of his own business, he said, hundreds of thousands of jobs could be lost because of the ban. Earlier last March, TikTok said that the app has created at least 224,000 jobs in the United States. "I am not sure what these people will do if TikTok is banned," Shira said.
30-year-old Ileana Justin has nearly two lakh followers on her TikTok account. He also expressed similar concerns as Shira. In 2021, she and her husband posted on TikTok about requiring guests to wear masks at their upcoming wedding to prevent the spread of the coronavirus. Through this he started publishing content on his TikTok account. Since then he entered the world of controversial content creators. He mainly creates content on lifestyle, political topics. His content topics include topics such as paid family leave, abortion, and gun control.
But Ileana is not a full-time content creator like Shira. But he spends a lot of time on the platform. He is concerned for others beyond his own financial calculations. He is especially worried about those who are completely dependent on their success on TikTok to earn money. Ileana said the platform gives small traders an opportunity to market products and grow businesses. Businesses can be completely transformed using TikTok. I have many friends who have turned their businesses into full-time jobs because of TikTok.
Search for alternatives
But according to experts, banning TikTok may not do much harm to small businesses. But they must find an alternative and adapt to it.
Professor Mohammad Rahman of the Department of Management at Purdue University Daniels School of Business in the United States said, We are living in a digital economy. We are largely dependent on technology for all forms of communication and information. The idea of going back to how business was done before social media probably won't work anymore. Because consumers around the world are influenced by social media in how we gather information, how we buy what.
If TikTok is banned in the US, there are alternatives like Facebook. Experts predict that other social media may follow. Businesses are at hand to figure out their next steps. ByteDance has 270 days after President Biden signed the bill banning or selling TikTok on Thursday. However, if ByteDance has a legal battle, this time may increase.
Kristen Schiely, an associate professor of clinical marketing at the University of Southern California's Marshall Business School, says it's hard to say right now whether users will migrate to any platform if TikTok shuts down. In fact, Gen Z spends the most money on TikTok. Other platforms aim to reach Gen Z.
American TikTok users are not only a domestic business force, but have global influence. Entrepreneurs from other countries will lose TikTok's US audience. Some in the UK and Canada have already expressed concern. Last March, a TikTok spokesperson in Canada told Global News via email that a ban on TikTok in the US would be devastating for Canadian content creators and small businesses. The main goal of many Canadian small businesses and content creators is to reach Americans.
Shielli said many cosmetic and skin care brands from Korea and China are coming to the United States. The quality of beauty and skin care products from Korea and China is excellent. Right now their business is very big on TikTok. They too will find it difficult to reach US consumers without TikTok. International brands will also find it difficult to reach US consumers. Shealy hopes many will adapt, but worries that many small businesses will be lost to big companies and international brands.
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