Home » Small businesses on TikTok contributed £1.63 billion to UK GDP in 2022 

Small businesses on TikTok contributed £1.63 billion to UK GDP in 2022 

13th Jul 23 9:29 am

Small businesses on TikTok contributed £1.63 billion to UK GDP in 2022, with regional areas outside London benefitting most, according to a new independent report from Oxford Economics, commissioned by TikTok.

TikTok launched in the UK in 2018, and has quickly become a destination for UK small businesses to reach new audiences – from disruptive beauty brands and vintage retailers, to restaurants and food businesses.

Millions of businesses showcase their goods and services on TikTok, with many using the platform’s growing marketplace, TikTok Shop.

TikTok users are highly motivated off the platform, with 47% having bought a product or service and 45% visiting a restaurant or tourist attraction as a result of seeing it on TikTok.

James Stafford, General Manager, Marketing & Operations, TikTok UKI & Nordics said: “We’re incredibly humbled by the inspiring small businesses that are coming to TikTok every day to promote and sell their products. As this report shows, TikTok has been a huge benefit to small businesses up and down the UK, helping them find new customers, grow their businesses and create jobs.

“We are proud of the role that TikTok is playing to help break down barriers to business. If you have a phone and a good idea, you can make a TikTok and it can be seen by millions around the world. We’ve also continued to invest in our offer for SMEs, from our ad products to TikTok Shop, so that we’re now making a meaningful difference in helping aspiring entrepreneurs to drive sales. I want to say a big thank you to our small business community who have made TikTok such a brilliant place to find unique products from all over the UK.

“TikTok’s success is down to our amazing creators and community, and this report shows that TikTok is a truly motivating experience for our users. Whether it’s visiting a great new restaurant, purchasing a gadget based on the #TikTokMadeMeBuyIt phenomenon, or getting into reading via a #BookTok recommendation, TikTok is driving economic and cultural engagement off platform as well as on it.”

Henry Worthington, Director of Economic Consulting, at Oxford Economics said: “Our research demonstrates how TikTok’s platform is being successfully leveraged by SMEs to grow their business and the significant level of economic activity that this sustains in the UK.

“In just a few short years, TikTok has shown that it delivers benefits for the small business community, supporting entrepreneurs from a range of backgrounds and circumstances, across the UK.”

£1.2 billion in revenue generated and 32,000 jobs supported due to TikTok

According to the research, investments from UK SMEs in advertising and marketing on TikTok generated a massive £1.2 billion in revenue in 2022 for UK SMEs, with the food and beverage sector benefiting the most (£0.6 billion). When investments in supply chains, and wider economic impacts are factored in, the total Gross Value Added (GVA) of SMEs on TikTok reaches a total of £1.63billion to UK GDP.

Over the past few years, we’ve seen more and more brands like Little Moons (@littlemoonsmochi) and So Sweet (@sosweetshopuk)  jumping on viral food trends, revolutionising the way we discover and appreciate culinary delights. Meanwhile, business services (£0.3 billion) and culture and entertainment (£0.2 billion) were also key sectors that saw an increase in revenue due to investments on TikTok.

TikTok is also driving growth for SMEs up and down the country, with around three-quarters (74%) of GDP contribution from SMEs occuring outside of London. TikTok’s accessible nature also extends to employment, with SME activity on TikTok supporting 32,000 jobs across all regions of the UK, with almost eight out of every 10 (78%) of these outside of London. The South East, North West and East of England are the regions beyond the capital that are seeing the most SME growth across both GDP contribution and jobs, thanks to TikTok.

SMEs on TikTok more likely to be from an ethnic minority or under 30

According to the research, more owners of SMEs on TikTok are from ethnically diverse backgrounds (55%). Around four in 10 SMEs (38%) that use TikTok have ethnic minority ownership, compared with just a quarter (26%) of SMEs in the UK.

TikTok is also making it possible for younger entrepreneurs to get involved. Around three in 10 (31%) SMEs that use TikTok are owned by people under the age of 30, compared with just two in 10 (21%) in the UK as a whole.

Rima Deu is a pharmacist of Asian descent and founder of Healthxcel (@joosters), a health supplement business. Rima has over 10 years of experience in the healthcare industry, and founded Healthxcel to help and empower people to live healthier lives. After launching a TikTok campaign using the platform’s ad format, Spark Ads, her business has seen a 400% rise in sales of their supplements.

Younger SMEs spending more of their social media budgets on TikTok

Younger businesses have been the early adopters making the most of TikTok, investing a bigger share of their social media marketing budgets to the platform compared to older businesses.

One in five (20%) businesses founded less than five years ago spend more than half of their social media budgets on TikTok. For businesses founded more than five years ago, only around one in 20 (6%) spend more than half of their social media budget on TikTok.

Overall, in the sectors analysed, younger SMEs are both more likely to use TikTok, and to use it with more force by dedicating more budget to it than their older counterparts.

Paige Louise Williams is a young female entrepreneur who founded her own makeup business, P. Louise Cosmetics (@plmakeupacademy) in 2018 at the age of 25.

Paige has since built a successful beauty empire, creating products developed by industry specialists at affordable prices. Since launching on TikTok, Paige has seen incredible growth, connecting with an even wider community of make-up fans and reaching 126,000 orders in the first three months selling products on TikTok Shop.

Small businesses benefit from TikTok, even if they’re not on TikTok

Most SMEs feel strongly that TikTok is giving them a powerful ability to reach new customers, connect with existing customers, and market new products and services.

Three-quarters (75%) of SMEs said that TikTok has had a positive impact on their ability to reach customers in the UK. A similar number agreed that TikTok had helped them engage with more customers and receive feedback (74%), market new products and services (72%), and stand out as a business more clearly (67%).

Even those SMEs that are not using TikTok are benefiting from it. Almost one in 10 SMEs (8%) that do not use TikTok say they have benefitted from exposure on the platform, when their products or locations have been used organically in TikTok videos.

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