The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Sebastian Pellejero

NEW YORK, August 4 (Reuters Breakingviews) - TikTok shoppers have created a seller’s market. The app’s users are driving U.S. purchases of everything from toys to chocolate, with word sometimes spreading so quickly that it causes commodity shortages and price spikes. This fast-growing bazaar is reshaping consumer markets in real time and presenting new challenges for conventional retailers still catching up on basic e-commerce.

The Chinese-owned social media service’s algorithmic reach has turned casual scrolling into impulse buying. Unpredictable demand is exerting fresh pressure on already-strained supply chains. Sales of Pop Mart’s 9992.HK Labubu plush dolls exploded, for example, after unboxing videos turned scarcity into performance art, propelling its market value 10-fold to some $40 billion, more than twice Hasbro HAS.O and Mattel MAT.O combined.

Food and beverage markets are also buckling under TikTok’s power. Matcha’s popularity from wellness clips sparked a global shortage, pushing up prices for the ceremonial-grade powdered leaves more than 80%. Japanese teahouses have restricted bulk orders and rationed stockpiles. Pistachio-stuffed Dubai chocolate experienced similar U.S. surges, contributing to a 30% increase in the nut’s price because of accompanying supply shortages.

This phenomenon is replicating abroad, too. In Southeast Asia, now home to about two-thirds of TikTok Shop’s estimated sales last year, social commerce is more embedded in daily life. Nearly half of European Generation Z consumers said they prefer clothing brands seen on influencers, compared to a fifth who favor ones worn by friends, a survey by marketing agency NERDS Collective found. Latin American e-commerce giant MercadoLibre MELI.O also is partnering with popular online fashion stars, helping put the company’s total sales on track to rise 32% this year, according to Visible Alpha.

These trends are a big reason why U.S. advertisers are projected to spend more than $30 billion on TikTok in 2025, implying faster growth than Instagram and other peers, per the World Advertising Research Center, despite enduring nagging political pressure. With an estimated $10 billion of annual shopping revenue, the app already is on par with 40-year-old TV-shopping pioneer QVC.

The app’s virality, however, is throwing traditional industry forecasting, built on slower cycles and seasonality, into further disarray. Moreover, the pace of U.S. online sales growth has slowed, with the $300 billion generated in the first three months of the year less than 1% higher than in the previous quarter and just 16% of the total, according to Census Bureau figures. TikTok’s shopping sprees only make it harder for orthodox retailers to keep up in a race against the clock.

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CONTEXT NEWS

Growing demand for matcha, fueled by TikTok videos, hoarders and resellers, has triggered a worldwide shortage and steep price hikes of the powdered tea, The Wall Street Journal reported on July 9.

(Editing by Jeffrey Goldfarb; Production by Pranav Kiran)

((For previous columns by the author, Reuters customers can click on PELLEJERO/ Sebastian.Pellejero@thomsonreuters.com))