Report Details TikTok’s Impact On Minority-Owned Business Success

A report released April 4 shows minority-owned small and mid-sized businesses that have a presence on TikTok rely on the popular app as a critical part of their marketing and community-building strategies.

The research was conducted by Oxford Economics, in partnership with TikTok, to measure the economic value that TikTok provides to businesses and consumers across the United States, according to the report’s methodology. The study included a survey of 1,050 small and mid-size businesses (SMBs) and 7,500 consumers. To participate, SMBs needed a TikTok account for business use and consumers needed one for personal use.

According to the study, 64% of Black-owned SMBs said a meaningful portion of their business’s success or growth is directly attributable to their marketing efforts on TikTok, and 57% said TikTok is critical to their business’s existence.

By comparison, 36% of non-minority-owned SMBs said TikTok was critical to their business’s existence.

Beyond viral videos of dance choreography and lip-syncing, TikTok has also been shown to be a useful tool in reaching new businesses audiences. According to the report, 93% of Black-owned SMBs say the app improves their ability to reach new and diverse audiences in the United States, and 91% say it improves their ability to expand the reach of their businesses in the geographical areas where their businesses are already active. Forty-three percent say they have been able to generate supplemental or even principal incomes directly from their use of TikTok.

Additionally, the hashtag #blackownedbusiness has over 1.5M published videos, attracting more than 3.3B views and 177M minutes of watch time in one year alone, according to the report.

The report also looked at the impact of TikTok on Hispanic-owned SMBs, and found that 60% say a meaningful portion of their business’s success or growth is attributable directly to TikTok marketing efforts. This includes 68% who say they have hired an employee directly through the app, 70% who say they have attracted a new investor on TikTok, 84% who say they have sold out of a product thanks to TikTok marketing efforts, and 86% who say their sales have increased after promoting their business on the app.

Hispanic-owned SMBs also reported using TikTok successfully to reach new audiences. Ninety-five percent said the app helps them reach new, diverse audiences in the United States, with 89% reporting using the app helps them reach audiences in areas where their business is already active.

Asian American Pacific Island (AAPI)-owned businesses also reported having success using TikTok to leverage their businesses and products, 55% reporting they have hired an employee through TikTok, 73% saying they found a new investor through the app, 61% reporting they sold out of products after promoting them on TikTok, and 88% saying their sales increased thanks to their TikTok marketing efforts.

There are several benefits to leveraging TikTok as a business owner, including the high growth potential for reaching your target audience. TikTok also allows customers to feel like they are seated at the table with businesses and their owners, which improves transparency and credibility for your business.

Experts recommend focusing on quality over quantity when it comes to creating TikTok content to promote your business and being as authentic as possible. The success of TikTok comes down to its focus on “what you see is what you get,” experts say, so focus on that high-quality, authentic content.