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Pinterests Investors Should Mind TikToks Gap

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Pinterests Investors Should Mind TikToks Gap #Pinterests #Investors #Mind #TikToks #Gap Welcome to TmZ Blog, here is the new story we have for you today:

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investors desperate for some inspiration wont find it on TikTok.

The Financial Times reported this week that TikToks live-shopping initiative has been failing to win over consumers and creators alike in the U.K., where it launched just last year, potentially damping expansion plans for the venture. Such a struggle would be an especially bad sign for fellow social-media platform Pinterest, which launched a similar initiative in the U.S. last year in Pinterest TV, featuring live, shoppable episodes by creators.

TikTok boasts more than 1.5 billion global monthly active users, according to estimates from data.ai. That makes its platform attractive to advertisers as it builds its ad business, whether or not its commerce initiatives such as live shopping succeed. But Pinterest, which just last week replaced its co-founder with a former commerce and payments executive, doesnt have that luxury. More than a decade after its launch, it had just 433 million global monthly active users as of the end of the first quarter. The platform shed users on a sequential basis over three consecutive quarters last year.

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TikToks TikTok Shop is available in Southeast Asia in addition to the U.K. and channels a commission-based model that has been especially lucrative for parent ByteDances Douyin in China. Still, citing a TikTok employee, the FT reported this week that the market for live shopping on TikToks platform just isnt there yet in the U.K., noting that many of TikToks live streams have seen poor sales.

It could be that TikToks problems are unique. Whereas TikTok is known for its younger, Generation Z audience, Pinterest has appealed to moms. It is somewhat difficult to imagine a teenager on TikTok taking the time to tune in to a live, QVC-type infomercial that might just resonate with Pinterests core demographic. Some of it also has to do with use case: One might idly open TikTok throughout the day without any particular agenda but open Pinterest to build something.

TikTok also has had its share of company-specific issues. The FT last month reported a staff exodus among TikToks London employees owing to a culture clash between local values and those of TikToks Beijing-based owner. The Wall Street Journal reported in May similar strains experienced by several of TikToks former U.S. employees, who complained of a lack of work-life boundaries.

Pinterest says it has no plans to roll out Pinterest TV outside the U.S. at this time. Even so, since Pinterest has more users in Europe than in the U.S., a U.K. failure for TikTok on any kind of shopping initiative would be especially concerning. Ads represent virtually all of Pinterests revenue today, but the company has named shopping as a strategic priority.

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Beginning in 2020, Pinterest launched a partnership with

Shopify

so that merchants could upload catalogs and create shoppable pins. The company also said it was beta-testing algorithmic-based customized shopping pages for some U.S. users in the first quarter. Earlier this year, Pinterest bought a shopping platform powered by artificial intelligence, THE YES, which enables personalized shopping, with the intent of integrating the technology into its own platform. Those initiatives are even more challenging: The personalized e-commerce company

Stitch Fix,

for example, has shed 95% of its market value since January 2021 in the midst of declining revenue and profit loss.

Investors have to hope Pinterest can give these commerce models a better fit.

Write to Laura Forman at laura.forman@wsj.com

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