By Arriana McLymore, Helen Reid and Doyinsola Oladipo

TikTok’s Shutdown Threatens Small Businesses and Influencers

NEW YORK (Reuters) – TikTok’s expected Sunday shutdown poses the biggest threat to the universe of small- and medium-sized firms and so-called influencers who depend on the short-form video site for their livelihood, while big brands are expected to move to other sites.

TikTok says its U.S. site generates billions for businesses selling candies, beauty products, clothes, and other consumer goods. But now, that economy is under threat. The Supreme Court on Friday unanimously upheld the law banning TikTok in the United States on national security grounds ahead of a blackout this weekend.

After the ruling, President-elect Donald Trump said he would make a decision on TikTok, without providing details.

As a marketing tool for businesses, Bytedance’s TikTok generates revenue for itself, and for many of its users and merchants, through sponsorships and by collecting fees on sales.

Many TikTok users are paid to be brand ambassadors for companies, selling merchandise and affiliate partnerships where users are paid commissions by companies when audiences purchase items linked on their social profiles. TikTok also compensates some creators for making videos.

Those who receive revenue from TikTok include startups, consumer companies, and bloggers cashing in on the platform’s massive reach of up to 170 million Americans.

For example, small- and medium-sized food and beverage businesses saw revenue increase by $4.1 billion in 2023 from marketing on the app, according to estimates by economic advisory firm Oxford Economics, commissioned by TikTok.

TikTok CEO Shou Zi Chew stated that seven million American businesses earn a living on the platform.

For Mama V’s Candy, TikTok Shop, the e-commerce arm of Bytedance’s video platform, changed the trajectory of the business, said owner Valerie Verzwyvelt. “We have pretty much stayed viral since the beginning of the TikTok shop launch last year,” said Verzwyvelt, whose company made $6 million in 2024 selling extremely sour candies and sold nearly 300,000 units on the app. “I have to rebuild my business now,” she said.

Sven Greany, co-owner of California-based independent beauty brand Simply Mandys, stated that a TikTok ban would bring his business to a “screeching halt” after a record holiday shopping season. Simply Mandys made over $20 million in sales in 2024 on TikTok Shop, and Greany mentioned he never worried about the app’s ties to China, as ninety-five percent of his company’s total sales come from TikTok shoppers. However, they plan to shift marketing to Instagram once TikTok is banned.

Other businesses are holding sales and dropping prices to clear inventory, anticipating traffic disruption. Influencers are also recommending products as they seek to earn ahead of the ban. One user told her 65,000 followers about clearance products for skincare.

Beyond commissions, a TikTok influencer with 10,000 to 100,000 followers can potentially earn $2,000 per brand campaign, according to Lithuania-based influencer marketing agency Billo. For top U.S. creators, their income will halt while major companies pivot to platforms like YouTube or Instagram.

Oxford Economics reported that small- and medium-business activity on TikTok contributed $24.2 billion, a small sliver of U.S. gross domestic product (GDP) in 2023, while supporting 224,000 jobs. Reuters could not independently verify those estimates.

Yuriy Boykiv, chief executive of e-commerce consultancy Front Row, indicated that his clients made plans to shift marketing spending to platforms with similar short-form videos, including Instagram and YouTube. “Every client has known about this possibility of TikTok going away since April of 2024,” he said.

“We go where our community is, currently including TikTok. If they shift to other platforms in the future, we’ll be right there with them,” stated Kory Marchisotto, chief marketing officer at e.l.f. Beauty (NYSE:ELF).

Mitchell Halliday, founder of British beauty brand Made By Mitchell, which launched on TikTok Shop U.S. at the end of August, began selling on TikTok Shop in the UK in 2022 and became the first British beauty brand to reach $1 million in sales in one day on the platform. “TikTok is the hub of beauty nowadays. It used to be YouTube, then Instagram, and now it is TikTok,” Halliday remarked.