TikTok plans to open studios in Los Angeles and other cities to get creators out of their living rooms and provide a souped-up environment for livestreams with the goal of ramping up product sales, The Information reported Tuesday.
The locations could each support multiple studios and dozens of creators pitching goods — many supplied directly by manufacturers — each day as the Chinese-owned app aims build its ecommerce arm, the report said, citing sources familiar with the project.
TikTok added online retail to the hugely popular app in June. The unit is believed to have lost more than $500 million last year, the report said.
The short-video app’s Chinese cousin, Douyin, also owned by parent ByteDance, used influencer livestreams to develop a shopping business that brought in $208 billion in 2022, the report said. ByteDance believes TikTok could “reach the same scale in shopping as Douyin,” the report said.
The studios with professional cameras and lighting are seen as providing a boost for making the Home Shopping Network-like videos, which feature hosts unwrapping and demonstrating a range of products. Douyin or TikTok take a percentage from each sale, while creators earn commissions set by merchants.
The move echoes the 41,000-square-foot YouTube Space Los Angeles that the video streamer opened in 2012 for creators, which closed during the pandemic and never reopened.
LA is the natural target site, the report noted, because Hollywood draws so many aspring actors, comedians and musicians. The location could become a hub for many more like facilities nationwide, the report said, similar to Shenzhen, China. “In that industrial city, companies operate huge studios where livestreamers broadcast hours of reviews, often flanked by shelves of baby products and kitchen appliances,” The Information reported.
TikTok execs are mulling over whether to charge creators a membership fee to access the facilities, according to the report. It may also work with agencies on the project, which would facilitate getting products sent directly to the sites.
Since June, the company has subsidized merchants’ deep discounts to customers and perks to influencers who sell on the app. It also has a marketplace to match creators to products they can sell.