OXFORD STUDY REVEALS TIKTOK’S BENEFITS TO MINORITY BUSINESSES AMID PROPOSED TIKTOK BAN

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Although TikTok is currently fighting to remain in American app stores over concerns of national security, minority-owned small and medium sized businesses (SMB) say that the app is vital to helping them find success in a crowded marketplace.

As Inc. reported, a study from Oxford Economics indicates that Black, Latinx, and Asian/Pacific-Islander-owned businesses consider the app to be a lifeline. TikTok commissioned the study to gauge the economic impact of the app on the American business landscape.

According to the study, “Social media provides these businesses with opportunities that may have historically been denied. Barriers such as access to capital, contracts with marketing firms, and access to media all may be much less critical when promoting business capabilities on TikTok.”

The report also indicated that minority-owned SMBs are given access to brand deals that they wouldn’t otherwise have access to without TikTok. “Nearly half (45%) of SMBs from minority groups say that TikTok enables them to establish lucrative brand partnerships and sponsorships that would have been more difficult to establish without the app.”

Small business owners, like the CEO of Brandon the Plant Guy, Brandon Hurst, recognize that a ban on TikTok would represent an incalculable loss. Hurst told Inc. that TikTok has a unique ability to provide SMBs with reach they would not have from other apps.

“I think they (legislators) think there are a lot of social media apps, and we could just go join another app and still continue to promote our business.” Hurst said. “I don’t think they realize that TikTok has the true unique ability to reach people you would never reach on any other app.”

Corroborating Hurst’s claim is a report from Business Wire, which maintains that TikTok results in more engagement than Instagram. Molly Burke, a senior retail analyst at Capterra, told the outlet, “SMB performance on TikTok is strong. Most are seeing a positive return on ad spend, rising sales attributable to TikTok, and engagement above and beyond what they receive on any other social media app, including Instagram and Facebook.”

Capterra also expects TikTok to have a strong 2024 as their survey of SMBs indicates that they will increase spending on marketing on the platform over the rest of the year. Although it is unclear if the reports of TikTok’s assistance to SMBs will be successful in staving off a potential ban, the $24 billion the app helped to generate in economic activity is difficult to ignore.

As TechCrunch reported, although the bill went through the House of Representatives quickly, the forecast for the Senate is less positive. Senators like Senate Commerce Chair Maria Cantwell (D-WA) acknowledge the national security concerns, but also know that if the bill passes, there are potential First Amendment challenges that would likely come up.

Sen. Cantwell emailed TechCrunch a statement: “These are national security threats and it is good members in both chambers are taking them seriously,” Cantwell said. “Following today’s House vote, I will be talking to my Senate and House colleagues to try to find a path forward that is constitutional and protects civil liberties.”