Shopify and TikTok agree to collaborate. What it means for action.

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Shopify

the shares met on Tuesday, after the company announced an agreement with TikTok that would allow companies to create digital storefronts and give consumers the ability to buy products directly through the social media app for the first time.

Shares of Shopify (ticker: SHOP) rose 4.9% to $ 1,553.78 in the afternoon trading.

The deal with Shopify marks a significant step for TikTok’s efforts to generate revenue from the social commerce behavior that is already occurring on its platform. The creators and influencers who use the app to post short video content already contain specific articles in their videos, but currently don’t have a direct showcase for the missing products.

“By enabling new in-app shopping experiences and discovering products at TikTok for the first time, Shopify drives the creative economy on one of the fastest growing social and entertainment platforms in the world,” the president said from Shopify, Harley Finkelstein.

While previously users could buy products through ads on the platform, Shopify said the pilot program will allow TikTok users to add a tab to their TikTok profile and link them to the products in their posts. The stores will open to all retailers in the fall, the company said.

As part of the pilot program, Kylie Jenner has launched a showcase for her skin care brand Kylie Cosmetics. Jenner’s personal TikTok account has over 30 million followers and the brand has approximately two million followers.

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Rival social network

Facebook

(FB) has had significant success with its social commerce efforts and its efforts to build tools on the basic platform and Instagram have been successful. How De Barron recently highlighted, Facebook has 1.2 million active stores, where small and medium businesses can take advantage of their huge social network. Shopify also has deals with Facebook.

The creators who are likely to generate the most sales through TikTok’s new offerings are also increasingly important for the big platforms. On Monday, Alphabet’s YouTube (GOOGL) revealed that it had paid creators $ 30 billion over the past three years. And for its part, Facebook said it planned to spend $ 1 billion on payments to creators. TikTok has said it will spend hundreds of millions on payments from creators.

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