US TikTok ban would be ‘devastating’, UK firms warn

A TikTok ban in the US could have a “potentially devastating” impact on some UK businesses, online traders are warning.

President Biden has signed into law a bill that gives TikTok’s Chinese owner, ByteDance, nine months to sell its stake in the app or it will be blocked in the US. TikTok has said it will challenge this in court.

Some 1.5 million UK businesses operate on the app, according to TikTok.

Isobel Perl, founder of Perl Cosmetics in London, is worried about the possible impact of a ban as a quarter of her sales now come from the US.

Ms Perl founded her skincare and accessories business after losing her job during the pandemic and uses apps such as TikTok to drive traffic to her website.

The first six months were “just figuring out how to run a business on her own” and it wasn’t until she started using TikTok that the brand really took off, she said.

“I mostly use TikTok to drive sales to our website, of all the social media apps it drives the most traffic”.

She’s been using the app to grow her business outside of the UK.

A TikTok ban in the US “could be potentially devastating to businesses in the UK, TikTok is quite a unique way of reaching customers,” she said.

Kyle Frank, founder of Franks Remedies, also sells skincare products on TikTok.

He’s worked hard to grow his customer base on the app and America is now a big market for him.

He told BBC World Service’s Marketplace programme, that a ban would really hurt his business.

“Certain months 60-70% of our monthly sales have come from the US,” he said.

The US has become his second biggest market and TikTok has been a successful way of reaching those customers, he added.

“We haven’t really had to spend any money on ads or marketing to get those customers and connect with them.”

Why does the US want to ban TikTok?

In recent months US officials have voiced alarm over TikTok’s popularity with young people.

The law has been introduced because of concerns TikTok might share user data with the Chinese government – claims it has always denied.

TikTok said it would challenge this “unconstitutional” law in court.

“The fact is, we have invested billions of dollars to keep U.S. data safe and our platform free from outside influence and manipulation,” it said in a statement.

A spokesman for TikTok denounced the bill, saying it “would trample the free speech rights of 170 million Americans, devastate seven million businesses, and shutter a platform that contributes $24bn (£19.4bn) to the US economy annually”.

Jenny Bailey from Merseyside runs Calla Shoes, a footwear brand that specialises in shoes for women with bunions.

She said whenever she sees a big surge in traffic from TikTok, a lot of those customers are from the US.

“We’ve managed to grow our US revenue from around 20% to 50% of our total business,” she said.

If TikTok does end up being banned in the US she believes “the opportunity to grow organically as quickly as we have would be severely affected”.

Other social media apps that Jenny uses just don’t have the same impact, she said.

“We know what works on TikTok can sometimes work quite well on Instagram, but we don’t get those big spikes in traffic from the USA on Instagram that we see on TikTok.”

It could take several years before the app is blocked as legal action, likely all the way to the Supreme Court, would delay the process.