Small Businesses Are Winning on TikTok Shop

U.S. small businesses on TikTok Shop saw their sales climb 66% in 2025, reaching more than 215,000 active sellers on the platform. That represents a 25% year-over-year increase in the small business seller base. The growth is happening even as larger brands like Ulta Beauty, Sally Beauty, and Disney opened storefronts on the same platform. Smaller sellers are not losing ground. They are finding their footing in a different way.

The data comes from a new report by GlobalData commissioned by TikTok Shop, based on a survey of 6,000 U.S. consumers conducted in April and May. The report examined how people discover and buy brands on the platform, and the findings challenge assumptions about who wins in social commerce.

The Discovery Gap That Small Brands Are Exploiting

The report found that 67% of consumers go to TikTok Shop when they want to discover new products and brands. That puts TikTok Shop ahead of Amazon, which scored 57% on the same measure. For small businesses, being where customers go to discover rather than where they go to buy on a known item is a meaningful distinction.

Further, 66% of TikTok Shop users discovered a new brand on the platform during the past year. Small businesses accounted for most of those discoveries. The report found that 72% of brands discovered by TikTok Shop users over the past 12 months were businesses with less than 15 million dollars in annual revenue.

The path from discovery to purchase is shorter than most platforms assume. About 58% of consumers who discovered a small brand on TikTok Shop later bought from that brand on the platform. More than half of those buyers made their purchase within days. Roughly one-fifth bought something the same day they found the brand.

Why Entertainment-First Changes the Growth Equation

Neil Saunders, managing director of GlobalData, said TikTok Shop operates differently from traditional online marketplaces because shopping is built directly into the app endless stream of short videos and livestreams. A user may open TikTok to watch outfit hauls, makeup tutorials, or comedy clips, then suddenly find themselves buying a product featured in the video without ever leaving the feed. Tapping on a product link inside a creator post or livestream can take shoppers straight to checkout in just a few clicks.

The platform is sticky because it fuses retail with entertainment. That combination creates a discovery environment where small brands can compete without needing massive advertising budgets. The discovery mechanism is built into the content experience rather than requiring a separate search or shopping intent.

Saunders said smaller brands often perform well because founders appear in their own videos and speak directly to customers. Authenticity is a major factor in how the algorithm surfaces content. What better algorithms surface is great storytelling, great narratives, really authentic content that resonates. For small businesses with limited resources, that authenticity advantage is accessible in a way paid media is not.

How One Fragrance Brand Jumped From 400K to 32 Million

Megan Reep, founder of Mavwicks Fragrances, described TikTok Shop as taking her small business to the moon during a holiday event TikTok hosted in New York in November. Before joining the platform, the fragrance company generated roughly 300,000 to 400,000 dollars in annual sales. The first year on TikTok Shop, the company jumped to 32 million dollars in sales.

Mavwicks treats its livestreams like entertainment events. During a recent live session, we had a dunk tank, and every time someone bought a bundle from us, we would get to dump my husband in the dunk tank, Reep said. Keeping exciting things happening on screen during live selling helps drive engagement and keep people watching. The format turns a product demonstration into something people stay for.

The jump from 400,000 to 32 million in annual revenue is not typical, but the pattern behind it is replicable for brands willing to treat livestreaming as entertainment rather than just another sales channel.

Creator Recommendations Keep the Engine Running

Creator recommendations continue to drive much of TikTok Shop shopping activity. The report found that 70% of TikTok Shop consumers have purchased a product recommended by a creator. Of those shoppers, 88% made those purchases within the past year, indicating regular behavior rather than one-time experiments. Another 73% said they go to TikTok Shop for inspiration when considering creator-backed products.

Patrick Nommensen, head of strategic initiatives at TikTok Shop, said the platform works because it is an ecosystem where brands of any size can connect with their target audience through video, livestreaming, and community elements. The structure is different from a traditional marketplace. It is closer to a content platform where commerce happens as a natural extension of the viewing experience.

For small businesses deciding where to invest their time and limited marketing budget, the numbers are worth noting. Discovery is happening on TikTok Shop at higher rates than on Amazon. The path from discovery to purchase is short. And creator-driven content creates a compounding effect where each successful product showcase builds on the last. The brands that understand this are not waiting for the platform to mature before committing.

Sources

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