TikTok – A Great Sample Of Digital Transformation In The Economic Market

Due to the rapid development of the Internet, the modern medium of communication no longer relies on paper-based transmission, but rather on a digitized approach(Benkler, 2006). Digitization is considered one of the most highly discussed topics in the 21st century. This is because digitization does not only exist in the field of social communication but the economic market is also affected. Thus, the old economic models have become more challenging and innovative due to digital transformation.

“Digital Transformation” by Cerillion is licensed under CC BY 2.0. To view a copy of this license, visit https://creativecommons.org/licenses/by/2.0/?ref=openverse.

According to Almunawar (2022), digital transformation is defined as a process of renewal that disruptively creates new economic markets. For example, in the old economic market system, companies did not rely exclusively on the digital medium to communicate and promote their business. However, digital transformation has made it necessary for companies to make changes to their old mode of operation, such as registering a website, adding positions to sustain online marketing, and so on. In the digital age, some companies are eliminated and some companies are awakening quickly, even expanding globally and occupying a relatively large part of the economic market; TikTok is one such software.

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Therefore, this blog will use TikTok as the main reference example to analyze the impact on the economic market in the digital age and the challenges and opportunities of TikTok’s emergence in the economic market.

What Is TikTok?

TikTok, one of the most famous companies in the transition economy, is a live social networking platform focused on music sharing developed by ByteDance. ByteDance first rolled out the software in China in September 2016 and moved to the world after capturing a fairly large market share in the transition economy. Statistics show that TikTok was downloaded more than 738 million times in 2019 and distributed in 155 countries (Ma & Hu, 2021).

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This blog believes that the fire of TikTok is not unfounded, its mode of operation refers to some previous hot social software such as Instagram and YouTube, which are two kinds of social media that can post pictures and watch videos. The flexibility and low barriers to recording not only attract professional social media influencers but also give many audiences who previously dreamed of being YouTube influencers a new opportunity to showcase their talents.

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What Impact TikTok Brings To The Economy Model?

In the beginning, TikTok did not have a mature marketing model and profit system, so it did not greatly impact the old economic market, and the society’s concept of TikTok was just a short video platform. By analyzing the influencers of the huge fan base volume, ByteDance found that some bloggers such as beauty bloggers would softly promote their products in their videos. Some pet bloggers would have a large audience in the comments asking about ways to purchase pet products. Also, these influencers used the mode of video as a marketing model to earn commissions and advertising fees. As a result, TikTok updated the Chinese version in 2021 to include a regional section called ‘Douyin Mall’, where users would see a shopping cart icon displayed underneath the influencer’s video, and if they wanted to purchase the product, TikTok would jump to the mall interface, allowing audiences to unify and make purchases through the TikTok platform.

“Online shopping” by Robbert Noordzij is licensed under CC BY 2.0. To view a copy of this license, visit https://creativecommons.org/licenses/by/2.0/?ref=openverse.

This change overturned TikTok’s previous operating model. Turing from an unprofitable public service-oriented platform into a social platform that integrates shopping, video, music, and socializing. As a result, the impact on the old economic market is that small and medium-sized businesses can no longer rely on offline retailers or their websites as their main marketing model, and by partnering with TikTok influencers, presenting their brands and stores in a virtualized form on the TikTok Mall has become a much better sales strategy for selling their products (Nesterenko et al.,2023).

What Impact TikTok Brings To The Economy Model?

Moreover, TikTok has also pioneered the feature of live streaming through which influencers can better sell the products of the manufacturers they work with.

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Similarly, TikTok has not only retained the usual live streaming features such as separate rewards and comments for the anchors, but has also developed a ‘link’ model where products marketed by bloggers during live streams. Products can be purchased directly through the ‘shopping cart’ icon underneath the live streams, and the price will be cheaper than going to the offline purchase or the manufacturer’s website to buy separately. This marketing model attracted a large number of people who had previously spent money on the internet, and they moved to TikTok because of the lower prices of the products and the explanations of the influencers about the products. This strategy has allowed TikTok to change the old economic system, whereby the large internet shopping platforms have seen their share of sales decrease, and TikTok’s live product streaming model has challenged other digital shopping platforms to engage their audiences.

What Does TikTok Challenge The Economy Market?

TikTok has not only changed the old economic paradigm but also brought challenges and opportunities to the economic market as well as to the digital culture. The launch of TikTok Mall has quickly captured the market share of online shopping. Most small and medium-sized enterprises and retailers have signed up for TikTok Mall accounts to sell their products and services better. According to Ma and Hu (2021), TikTok may have less clear terms and conditions for the vetting of these businesses and merchants and whether there is someone to handle after-sales feedback on their products and services. The order in which TikTok Mall ranks merchants and businesses and recommends products is based on the promotional fees that the businesses have paid are all questions to be answered. So the challenge for digital culture in the economic marketplace could be that the marketing and the products don’t match up, and there is an element of fakery.

MARKETWATCH PHOTO ILLUSTRATION/ISTOCKPHOTO, Copyright from https://www.marketwatch.com/story/tiktok-will-use-your-data-to-fuel-its-multibillion-dollar-shopping-mall-whether-you-know-it-or-not-11666653414

There is also the fact that the range of marketing models introduced in TikTok has led to a loss of the cultural part of digital culture. Every audience can be an influencer in TikTok, but in an environment filled with sales models and soft ads, few influencers may be willing to go out and post ad-free work for the public good. Audiences can become visually fatigued. This also poses a challenge to the economic marketplace, as audiences quickly become apathetic to such a marketing model and no longer feel a desire to buy, and the digital transition may be headed downhill.

What Opportunities Does TikTok Bring To The Economy?

Furthermore, digital transformation also brings many opportunities to the economic market. Take TikTok as an example,  as a short-video platform TikTok in the seven years has rapidly broadened its market to become one of the most influential short-video platforms in the world, which symbolizes the awakening and popularity of digital culture. TikTok’s sales and promotion model undoubtedly inspires other digital media, and it is also more beneficial than detrimental to the economic market because such a digital transformation Promotes mass consumption whether they are buying a cheap or expensive product, the first thing that comes to mind is to compare prices through digital media as well as evaluate whether they want to buy the product or not through social platforms.

And, in the early 2020s, the world experienced the unprecedented pandemic COVID-19, where all industries were in decline and the digital medium became the only virtual face-to-face platform available to the masses. It was also because of the digital transformation that software like TikTok was presented to the masses, allowing the old economic system to be broken down. By creating shopping platforms and live streaming to sell products, TikTok has revitalized the decaying economic market and saved many medium and small businesses that were about to face bankruptcy due to the epidemic(Herberger,2021).

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To summarize, TikTok as one of the examples of digital transformation has changed the old economic market model, TikTok’s use of video soft ads and live promotions has changed the audience’s consumption concepts and habits, they are more inclined to online consumption. Digital culture also brings challenges and opportunities to the economic market, the incomplete policy of TikTok’s video platform and its profit model may lead to the rights of the audience being affected thus leading to the instability of the economic market again. The large number of videos in the digital age filled with consumption hints and recommendation advertisements also leads to aesthetic fatigue, reducing the audience’s desire to consume. However, digital transformation has also brought opportunities to the economic market, especially during COVID-19, allowing many businesses and enterprises to discover business opportunities and save from bankruptcy. TikTok’s operational model and marketing concepts have also established a good foundation and role model for many digital cultures that are developing and transforming.


Almunawar, M. N. (2022). Digital transformation management: challenges and futures in the Asian digital economy. Routledge.

Benkler, Y. (2006). The wealth of networks: how social production transforms markets and freedom (pp. 29–34). Yale University Press, , C.

Herberger, T. A., & Jörg J. Dötsch (Eds.). (2021). Digitalization, digital transformation and sustainability in the global economy : risks and opportunities. Springer.

Ma, Y., & Hu, Y. (2021). Business Model Innovation and Experimentation in Transforming Economies: ByteDance and TikTok. Management and Organization Review, 17(2), 1–7. https://doi.org/10.1017/mor.2020.69

  Nesterenko, V., Miskiewicz, R., & Abazov, R. (2023). Marketing Communications in the Era of Digital Transformation. Virtual Economics, 6(1), 57–70. https://doi.org/10.34021/ve.2023.06.01(4)

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