💸 Exploring TikTok's Individual Harms for Young Adults

By Anna Semenova, Kathy Meßmer, Martin Degeling, Alexander Hohlfeld, Greta Hess.

This blog post continues a series of detailed examinations dedicated to elaborating on the findings from our scenario testing, which we have outlined in our blog post “TikTok’s Impact on Consumer Rights: A Closer Look!”. Each blog post focuses on one step of the theoretical framework of risk assessments, as developed in our risk-scenario-based audit process (RSBA; for our methodological reflections, read our blog posts on the methodology).

In the following, we will examine the tangible harms individuals or groups may encounter when using TikTok. These harms are always linked to the systemic risks under investigation. Specifically, our focus in this scenario is on researching risks related to consumer protection, particularly overspending or hidden costs that may emerge from purchases related to TikTok.

The estimation of individual harms is based on data collected through a semi-automated data collection process and our survey. For a detailed explanation of the data collection process, please refer to the corresponding blog post on methodology.

Survey shows mixed experiences with TikTok-related purchases

Online shopping is becoming increasingly integral to the TikTok experience. Shopping features on TikTok have already seen significant integration in regions such as the United States, where TikTok Shop was introduced in 2023, and China with Douyin’s ‘Live Shopping,’ which has been widely adopted over the past few years. Although the rollout of shopping features on TikTok has been paused in Europe, TikTok-related purchases prove to be significant in Germany.

From our survey of 1634 individuals between 18 and 25 in Germany, 59% disclosed using TikTok, with 35% of them reporting purchasing items after seeing them promoted on the platform. We specifically asked these 35% of respondents about their experiences with TikTok-related purchases.

Despite a notable majority (71%) expressing satisfaction with their purchases, a significant portion of TikTok shoppers (62%) encountered negative experiences, with 37% reporting both positive and negative encounters.

Product dissatisfaction is a leading cause of negative shopping experiences

Our investigation uncovered numerous dubious shops and drop shipping services, often comprising loosely connected online entities. The survey results confirm our findings about the prevalence of these unconventional retail models, as product dissatisfaction emerged as a leading cause of negative shopping experiences.

Over one-third of shoppers reported receiving products of lower quality than expected, while 18% faced challenges with product exchanges or returns. Most alarmingly, 16% indicated their inability to return products due to the non-existence of the shop.

This stands in stark contrast with statistics on product return satisfaction, where 95% of respondents reported satisfaction with their return processes. This suggests that dissatisfaction with return processes related to TikTok purchases is proportionally higher than the general population, indicating that TikTok may amplify the risk of unsatisfactory consumer experiences.

Overspending a second most significant contributor to negative experiences

An integral part of consumer protection is safeguarding consumers in the face of being exploited or misled within the market, which can lead to serious economic consequences for individual consumers. As a particularly vulnerable group, we were, therefore, especially interested in experiences that resulted in financial problems for young consumers, as they generally had less time to build a financial foundation in their lives.

Thus, financial strain reported by young TikTok users is a concerning aspect of TikTok shopping experiences. More than a quarter (28%) of shoppers admitted to overspending due to opaque pricing structures, 16% purchased products in installments and 16% of users reported going into debt as a result of their purchasing activities on the platform.

While we were surprised by this number, it is within range for this age group.

Using the TikTok Ad Library, we can see that between September and April more than 7,600 ads were removed due to “exaggerated financial claims,” totalling 35 million views before removal. The chart shows that ads are typically removed after they have already reached their intended audience, as demonstrated by the similar distribution of the number of impressions for all ads and the ads that were removed. For instance, we can associate this ad with this advertising campaign, which had over 281,000 impressions in 6 months before being removed for “exaggerated financial claims.”

Gender disparities in financial impact

Men seem to be disproportionately affected by negative financial outcomes from TikTok shopping, with 44% reporting adverse effects compared to 29% of women, and this difference is proven to be statistically significant.

Identifying the precise cause of this gender gap poses challenges due to data limitations. For instance, variations in self-assessment of financial strain between genders may contribute to this discrepancy. However, an examination of TikTok’s ad library provides some insights. We observed only minimal overlap in advertisers targeting specific genders; top advertisers focusing exclusively on women differ from those targeting only men. Additionally, there is a stark contrast in the predominant interests of the target audiences between ads aimed at men and those aimed at women. Ads targeting men predominantly focus on “Games”, whereas ads aimed at women prioritize “Beauty & Personal Care.” Although these findings suggest considerable divergence in advertisers and ad content across genders, further investigation is needed to establish causal links with gender disparities in financial impact.

Higher consumer literacy mitigates negative financial outcomes

Despite the occurrence of negative financial outcomes, our study reveals a notable level of consumer literacy among TikTok users. This indicates that, even with the presence of problematic advertising, young consumers are not entirely susceptible to its influence. The majority of users find it beneficial to engage in practices such as checking review sites like Trustpilot (82%), verifying imprints (79%), seeking information from consumer protection agencies (76%), or confirming the company’s registered office (70%).

Moreover, our analysis reveals a statistically significant correlation between consumer literacy and reported purchase satisfaction: individuals with higher consumer literacy levels (as defined by having chosen all correct options) exhibit a greater proportion of contentment, as evidenced by fewer reports of negative experiences. In the lower consumer literacy group, 33% had solely negative experiences, 40% both positive and negative, and 28% solely positive experiences. In contrast, among the higher literate, these numbers were 25%, 33%, and 42%, respectively.

Furthermore, our survey data indicate that users who self-report being susceptible to impulsive purchasing due to advertising or product recommendations also tend to report a higher incidence of negative financial consequences compared to less (self-reportedly) susceptible users (51% vs. 19%). This correlation suggests that initiatives aimed at empowering individuals to recognize and counteract the influence of advertising on their purchasing behavior could lead to a reduction in negative financial outcomes.

Summary

This blog post focused on the individual harms faced by young adults due to TikTok-related purchases, continuing our detailed examination of the findings from our risk-scenario-based audit process (RSBA). Our survey of 1,634 individuals aged 18 to 25 in Germany revealed that 59% use TikTok, with 35% of these users making purchases based on platform promotions.

Despite a majority of TikTok shoppers expressing satisfaction with their purchases, a significant portion reported negative experiences, including product dissatisfaction, issues with returns, and discovering non-existent shops. Additionally, financial strain was a notable concern, with shoppers overspending due to opaque pricing structures, purchasing on installments, or even going into debt. Different genders are disproportionately affected by negative financial outcomes, suggesting that there might be further differences in how various subgroups are impacted by online shopping harms, necessitating further research.

Our findings highlight that while only a subset of TikTok users faces these harms, the impact on those affected is significant, underscoring the need for better consumer protection and literacy.

Our analysis also revealed that higher consumer literacy mitigates negative financial outcomes. Users who engage in practices such as checking review sites, verifying company details, and seeking information from consumer protection agencies report higher purchase satisfaction and fewer negative experiences. These findings suggest that empowering consumers with better knowledge and skills can reduce the risks associated with TikTok-related purchases.