Reels vs. TikTok in the Fight for Video Commerce Market Share

TikTok had a strong 2021. The platform grew to over 1 billion active users in September 2021, up from 271 million in December 2018.

The introduction of TikTok Shopping was a statement of intent. Its first foray into the realm of social commerce, the feature was TikTok’s response to consumer cries for convenient shopping experiences. Consumer spending rose 77 percent last year compared to 2020, up from $1.3 billion to $2.3 billion.

And yet, despite these monumental results, TikTok’s dominance remains disputable. Meta’s latest results shows Reels, Instagram’s solution to TikTok, accounts for 20 percent of the time users spend on the platform. Instagram's decision to spend years improving its social commerce offering appears to be paying off.

With the market value of social commerce forecast to reach $1.2 trillion by 2025, stakes in this battle couldn't be higher. The question is, who will come out on top.

New Kid on the Block

TikTok’s emergence as a major player in the social media world is partly due to the pandemic — but it’s not the only contributing factor.

Users are blessed with endless pages of fresh content to scroll through. And TikTok’s algorithm ensures users enjoy relevant experiences. For example, the "For You" page is carefully cultivated using information surrounding content interactions and video formats.

The platform is also a haven for aspiring advertisers. TikTok’s investment in improving targeting capabilities has culminated in TikTok Pulse, a contextual advertising system allowing brands to place ads next to the top 4 percent of videos. Brands can deliver ads to users who are more likely to positively interact.

However, TikTok isn’t a perfectly polished diamond. There are some aspects which take the shine off. The platform’s managed service format for its shopping, feed-based ads is outdated and contrary to the self-service option that the majority of platforms have adopted — and agencies prefer. TikTok, thus far, only provides self-service for its in-feed ads, and in comparison to Meta, TikTok offers a lot less formats that are self-service, which is much more accessible for media buyers, and has come to be the standard.

If TikTok addresses these entry barriers and continues to invest in improving its shopping capabilities, it will have all the tools required to become a social and video commerce powerhouse. Few would be able to stand in its way.

The Old Guard

Reels has everything that TikTok doesn’t — aside from new, exciting content.

The countless catalogue ad and self-service formats are an agency’s dream. The lack of barriers mean brands can reap the rewards of social commerce with little effort.

And this has only become easier, with Meta recently announcing that it has opened up Reels to other formats outside of video, like statics and carousels. This was done to make Reels more accessible to advertisers that don’t have video content but still want to take advantage of the growing number of people using Reels.

Instagram has also paid attention to changing consumer behaviors. Instagram Checkout provides the perfect, seamless shopping convenience, ensuring consumers don’t have to leave the platform to complete their purchases.

Unfortunately, in every seed of good there's always a piece of bad. Reel’s algorithm doesn’t deliver content as well as TikTok — and many of the short-form videos are taken straight from its rival.

Instagram’s legacy is unmatched. And with Meta announcing plans to invest $1 billion into content creators on Facebook and Instagram, Reels clearly has the financial resources needed to become a serious social commerce option. But until it emerges from Facebook’s shrinking shadow, Reels will continue to play second fiddle.

The Underdog

With TikTok and Reels stealing the spotlight, spare a thought for Snap, the platform that started the short-form video craze.

Snap remains a crucial part of the social commerce landscape. Snapchat’s user base has been steadily growing — Q4 2021’s results showed 319 million global daily active users compared to 186 million in Q4 2018.

Snapchat’s unique selling proposition has evolved from instant image messaging service to augmented reality (AR) shopping platform, with the latter setting it apart from its main rivals. Partnerships have been key to Snap’s AR evolution, and its list of collaborations is continuing to grow:

• MAC Cosmetics: Try-on AR technology gave consumers the opportunity to try before they buy; the experiment’s results saw female purchases experience a 17-time lift.
• WPP: Creating AR ads for WPP’s clients meant that they could explore greater virtual ad opportunities.
• CNN and The Wall Street Journal: Snap’s attempts to improve interactions with audiences 25 and over. These partnerships facilitated a 25 percent spike in engagement over a year.

Snap, despite all its AR potential, simply cannot compete with the other social giants. Its future may lie in being sold further down the line, the result of which would be a bidding war that neither TikTok nor Meta could afford to lose.

Pulling No (Virtual) Punches

The social commerce battle is finely poised. Each of the aforementioned contenders have their own unique features which attract brands and consumers alike. And while Reels has spent more time perfecting and honing its offering, TikTok’s content performance means that the fight is far from over.

Thomas Esposito is the senior account manager, biddable, at Croud, a global, full-service digital marketing partner, combining data, technology and creativity to drive business for ambitious brands.