TikTok Shutdown Threatens Livelihoods for Small Businesses and Influencers

TikTok's impending shutdown poses a significant threat to the ecosystem of small and medium-sized enterprises (SMEs) and influencers who rely on the platform for revenue. While large brands are anticipated to migrate to other platforms, the shutdown disproportionately impacts those with fewer resources.

Impact on Small Businesses

TikTok plays a crucial role in the marketing strategies of SMEs, generating billions in revenue. According to Oxford Economics, food and beverage businesses alone saw a $4.1 billion increase in revenue from marketing and advertising on the platform in 2023.

For businesses like Mama V's Candy, TikTok has been instrumental in their growth. The e-commerce arm of TikTok, TikTok Shop, has driven significant sales for the company. Similarly, Simply Mandys, a California-based beauty brand, has made over $20 million in sales through TikTok Shop in 2024.

Influence on Influencers

Influencers on TikTok generate income through sponsorships, affiliate partnerships, and direct payments. According to Billo, a Lithuania-based influencer marketing agency, influencers with 10,000 to 100,000 followers can earn up to $2,000 per brand campaign.

For top U.S. creators, the TikTok shutdown would result in a complete loss of income. Major companies that have partnered with these influencers are expected to shift their campaigns to other platforms such as YouTube and Instagram.

Marketing Adaptation

In anticipation of the shutdown, businesses and influencers are implementing contingency plans. Many are shifting their marketing efforts to platforms with similar short-form video capabilities, such as Instagram and YouTube.

However, TikTok's privacy policy prevents sellers from accessing customer information that could facilitate marketing outside of the platform. This poses a challenge for businesses that rely heavily on TikTok's user base.

Government Response

The imminent shutdown has prompted legal action and political intervention. The Supreme Court upheld a law banning TikTok in the United States on national security grounds, and President-elect Donald Trump indicated that he would make a decision on the platform.

Conclusion

TikTok's shutdown would have a major impact on small businesses and influencers, potentially disrupting their revenue streams and livelihoods. As the shutdown deadline approaches, businesses and influencers are actively seeking alternative platforms and marketing strategies to mitigate the potential consequences.