From Trends to Transactions: TikTok’s Grip on the Global Economy

A 15-second video has the power to sell out a product overnight, as seen when the skincare startup Love & Pebble went viral in 2021 and its inventory disappeared within hours. Following their surge in popularity on TikTok, Love & Pebble gained national attention and appeared on Shark Tank, gaining even more exposure. Such success stories highlight TikTok’s growing role as more than just a social platform, but as a powerful driver of consumer behaviour and brand visibility. Indeed, since launching in the U.S. in 2018, TikTok has grown rapidly, with the platform being an essential tool for small and midsize businesses (SMBS). With 7.5 million businesses among its 170 million active users at the end of 2024, it provides a space for companies to promote their brand, connect with their customers, and scale their operations. Consequently, the platform’s purpose has long surpassed simply that of entertaining. TikTok dictates taste, shapes demands and influences global markets. What was once spontaneous scrolling has become an engine of mass consumption and unprecedented economic power.

TikTok’s power lies in its algorithms. Indeed, TikTok’s system is designed to show viewers videos based on their preferences as the “For You Page” (FYP) offers highly personalized content, based on the user’s activity: watch time, likes, comments, shares, etc. Thus, the FYP also acts like a personalized marketplace, showing users products they will most likely be interested in and purchase. This constant exposure pushes consumerism further by continuously presenting new trends and products tailored to each user’s tastes, encouraging spontaneous and repeated purchases. Taking it a step further, in September of 2023, TikTok introduced the TikTok Shop with the new feature allowing users to shop directly within the app, seamlessly blending entertainment and shopping. Such integration has yielded remarkable economic results: in 2024, TikTok Shop generated approximately $33 billion in global sales, including $9 billion in the U.S. and is projected to surpass $50 billion globally by 2025 (Wiesmann-Pitss, 2025). These figures underscore how TikTok has evolved into a key driver of online revenue, not only for the platform itself but also for countless brands and entrepreneurs who rely on it for visibility and growth.

In other words, TikTok’s operations generate substantial economic activity for businesses, individuals and even nations. For businesses, the platform democratizes advertising: SMBS can reach millions without traditional ad budgets, relying instead on authentic, low-cost videos. More specifically, according to a study published by Oxford Economics in March 2024, more than half of the interrogated SMBS (55%) (Oxford Economics, 2024) agreed or strongly agreed that TikTok is an essential tool for reaching potential customers and growing their business. A similar proportion of respondents say their business needs to continue to use and improve upon TikTok marketing content to stay competitive (53%). Moreover, the platform has provided individuals with a new source of income and has even become a full-time job for some. Indeed, TikTok introduced monetization programs such as the Creator Fund and the newer Creator Rewards Program, allowing users to earn money directly from their content. In fact, a 2024 report commissioned by TikTok found that the platform supports approximately 4.7 million jobs in the United States and 28 million workers globally, effectively stimulating spending, generating significant revenues across industries, and creating millions of jobs. TikTok has established itself as an essential force in the global economy, or in the words of Blake Chandlee, President of Global Business Solutions at TikTok, “[TikTok] is a catalyst for real economic opportunity, fueling job growth and innovation across the country.” (Jones, 2025)

However, as the digital era brings unprecedented efficiency and visibility, it also exposes the economy to new vulnerabilities. Two things can be true at the same time: while businesses can greatly benefit from participating in viral trends, success is often fleeting and limited by the brief lifespan of online virality. This volatility translates into inconsistent incomes and difficult sustainable growth. Thus, how can this system grow when it could collapse as quickly as it rose? The ongoing debates about Tiktok’s ban further emphasize its precarity. The United States has notably expressed growing concerns about national security, particularly regarding TikTok’s data collection practices and ties to China. This resulted in the app going “dark” for a day around January 18, 2025. If permanently banned, the U.S. could face significant economic repercussions, as it would include the loss of marketing channels for small businesses, halted income for millions of creators, and could slow down economic growth, with measurable effects on the nation’s GDP. This poses an important question about the future of the digital economy. If platforms like TikTok continue to hold such economic power, nations may need to rethink how they regulate and protect their online markets. 

In conclusion, TikTok’s rise marks a turning point in the global economy, where attention itself has become a powerful currency. Yet, with this power comes fragility. TikTok stands as both a symbol of innovation and a warning of overdependence on a single platform. Indeed, due to its precarity, TikTok makes millions vulnerable to even the smallest changes. A variation in the algorithm or a shift in policy can have immense consequences as they determine visibility, and consequently income for businesses and creators. The future of the digital economy will depend on whether society can harness the creative and economic potential of such platforms while ensuring they serve the public good, not just the algorithm.

References

“TikTok: Helping grow small and midsized businesses and deliver value for consumers across the United States” Oxford Economics (March 2024) TikTok_US_ExecSummary_March2024.pdf

“Measuring the numbers of jobs that benefit from US businesses using Tiktok” Oxford Economics (March 2025) Oxford-Economics_Jobs-Benefiting-from-TikTok_March-2025.pdf

Wiesmann-Pitts, Jessica. (April 25, 2025). “How TikTok Shop Is Redefining Retail: The New Playbook for Business Success” Global Banking and Finance Review https://www.globalbankingandfinance.com/how-tiktok-shop-is-redefining-retail-the-new-playbook-for-business-success

Jones, Marisa (March 12,  2025). “Tiktok’s economic impact on US highlighted in new report” Emarketer https://www.emarketer.com/content/tiktok-s-economic-impact-on-us-highlighted-new-report