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2 Stocks Set To Benefit From The Rise Of TikTok

The usage statistics show that TikTok is becoming the social media giant that draws the most eyes — but what companies will benefit?

Unfortunately, investors don’t get the opportunity to invest directly in this social media star as the company doesn’t trade publicly. But with the social media platform rising to the number one spot for the most visited site in 2021 — even surpassing Google — it’s becoming harder and harder to ignore the network this company has forged.

TikTok by the numbers

Statistics for the U.S. show that TikTok users are now spending 25.6 hours on the app every month — that’s 50% higher than the average U.S. Facebook user spends on its platform — and compared to Instagram, TikTok’s viewership time is now more than triple that of the photo-sharing platform in America. 

Taking a global perspective, statistics from 2018 show that monthly time spent browsing the app was a little above 5 hours, but fast-forward to 2021 and it has surged to just under 20 hours worldwide — that’s roughly 50 minutes per user every single day.

That’s a lot of screen time for the 1.1 billion users on the platform. Hence, businesses are flocking in droves to build out their TikTok strategy and generate sales, but which businesses are set to benefit from this mass monetization?

Shopify

Shopify (NASDAQ: SHOP) is the go-to business for digital stores for creators and influencers. It allows its users to promote, sell, and ship products straight from their digital storefront — and of course, the company’s service is integrated with TikTok.

The partnership allows TikTok for Business accounts to sync entire product catalogs and build ad campaigns. It also gives them an array of marketing tools and techniques, analyzes customer behaviors, targets certain demographics and audiences, and specifically categorizes the types of products you’re selling.

According to some sources, $2.3 billion was spent by shoppers on the platform in 2021, a 77% increase from the year prior. If that growth trajectory continues, we can expect this deal to pay off in a big way for the e-commerce solutions company.

Shopify makes money from transaction fees and subscription services for its merchants, so the more money creators make, the more Shopify pockets too.

Spotify

Spotify(NASDAQ: SPOT) isn’t chasing eyeballs in social media — it’ll leave that up to TikTok — it’s chasing eardrums. The pair have partnered up in a bid for Spotify to gain more users from a younger demographic and for Tiktok to give back to its users with a free value-add.

The deal struck gave TikTok users the opportunity to avail of 4-months free membership for Spotify premium in certain regions in the hope that the company would be able to translate them into fully monetizable users in the future.

Capturing younger audiences early on is key to bumping up the lifetime value of customers acquired for the Swedish music giant, and it’s a perfect matchup, given TikTok’s audio-first appeal in social media. Amid the ongoing audio streaming wars, Spotify wants to become the kingpin in all things music and podcasts. Tactically going after this audience will allow the company to maintain the top spot in audio, and win out against rising competitors such as Apple Music and Block’s (formerly Square) Tidal.

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