Milford small business owner worries TikTok ban would lead to layoffs
BOSTON - Ever since TikTok Shop launched last year, users started buying products directly through the app, and now it means millions of dollars for small and medium sized business all over the country, including a Milford mom who employs dozens of other moms. The question is, if there is an actual TikTok ban, what happens to them?
President Biden has signed legislation that could mean the end of TikTok in the United States. Congress has given the company 12 months to find a U.S. buyer or face a ban in this country, but that means significant implications for business owners who have seen explosive sales growth on the platform, especially since the launch of TikTok Shop.
Ecosystem of information and consumerism
Whatever you thought TikTok was, silly dances or funny videos, it's much bigger than that now. The algorithm sends users a continuous feed of entertainment, news, yes, big business. It's become an entire ecosystem of information and consumerism.
Michelle Silva of Milford owns Kali Rose Boutique, which is named for her daughter. "I don't think people really understand, it may be owned by China but the amount of people in the United States that would be affected by this...it is...almost every small business right now is on TikTok Shop," Silva said.
Silva has built a wildly successful business selling inclusive sized clothing to women sizes 0 - 24x, and she saw sales soar with TikTok Shop.
"It's honestly been such a blessing," Silva said.
Sales jumped overnight
From her new, larger warehouse just over the Massachusetts border in Woonsocket, Rhode Island, she ships jeans, tops, dresses, and bralettes within two days of order to customers who clamor for her styles.
"The bralettes have gone viral on TikTok over and over again," she said. "I mean really amazing."
In fact, in five years Silva's business went from her garage in Milford to a storefront, a small warehouse to the new 30,000 square foot facility in Woonsocket.
"We've grown a ton from 10 employees to over 40 employees," she said. "We have a day crew here, we also have a night crew, and we cater to mom hours...we have tens of hundreds of thousands of affiliates that are sharing our products as well."
With TikTok Shop, her business jumped from 400 to 5,000 orders a day overnight. That's real money.
What went through her mind when she first heard the phrase "TikTok ban?"
"It's very nerve-wracking not just for myself. It would be a detrimental effect on not only myself, my family, all of my employees that are treated like family," Silva said.
She fears she would be forced to lay people off, "oh I would...absolutely."
"It has to be a very, very measured approach if the government is to move in this direction," cautions Peter Tran of cybersecurity firm InferSight.
Tran adds that small business TikTokers should always diversify. "Never be so deep in one platform that you can't back out of it or pivot your business if something were to happen," Tran said.
But now, having a presence on TikTok is essential for business.
"My concern is how big of a target it will be," Tran said. "Because naturally this type of platform is going to get bigger, is going to expand its capabilities, and small, medium, even large corporations that have to, by mere survival, have a presence on these platforms to be able to compete effectively."
Why is TikTok so addictive and successful?
Tran says it fits perfectly into what Psychologist Abraham Maslow called our "Hierarchy of Needs" and TikTok checks every box.
People with a smartphone obviously have their basic needs met, and with the dopamine hit of each new video on the app, content creators convey a sense of belonging to a community, even love, which leads to feelings of esteem and ultimately self-fulfillment.
Tran says the algorithm is very, very, effective. "TikTok has done a phenomenal job at leveraging artificial intelligence," Tran said.
"TikTok famous" influencers
Then there are the "Influencers."
Think about what happened about a 100 years ago in one iconic scene in the 1934 movie "It Happened One Night."
Heartthrob Clark Gable took off his shirt and revealed his bare chest - and boom! Men's undershirt sales plummeted across America. One movie star, one moment, one product - that's influence. Now imagine millions of influencers on TikTok talking up millions of products to over 150 million users in the U.S. - the potential for growth is exponential. And with TikTok Shop, you see it, you click it, you buy it in seconds.
Massachusetts native makeup influencer Mikayla Nogueira is "TikTok famous" as the kids say for her enthusiasm for makeup and prominent Boston accent.
Now she, with 15.6 million followers, has more followers than Kim Kardashian (9 million). Her attitude? She'll just adapt to whatever comes next.
"My passion isn't TikTok." She said in a recent post. "My passion is to create. Do beauty videos and I can do that from any platform."
Michelle Silva is not so blasé. "It would be detrimental across the board to not just me, but to so many other small businesses in the United States," Silva said.
Tran sees the threat of a ban as a U.S. diplomatic tool of leverage with China. "I think the more important aspect is politicians don't understand what it is," he said, "and that's really driving the fear on Capitol Hill around the potential threat of a ban."
Economic impact of TikTok
TikTok means $5 billion in tax revenue, 224,000 jobs and over $24 billion to our GDP. Ban TikTok, and Tran fears the growth that might evaporate.
"TikTok is not going anywhere anytime soon," Tran said.
Michelle Silva and her employees are praying for a solution. "TikTok has truly been a blessing, so we're hoping that, we're keeping our fingers crossed that it doesn't go anywhere," Silva said.
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