Brief:

• TikTok creators for the first time will be able to sell merchandise to fans through the social video app as part of an integration with Teespring. The creator-driven commerce platform is currently testing the service with 7,000 creators before a broader rollout this month, The Verge reported.
• Teespring is determining which creators will be eligible to use the platform when it's introduced and how products will appear in videos. The goal is to add shopping features that are fully functional within the TikTok app, per The Verge.
• Creators who use Teespring have access to 180 products they can customize, including apparel and other merchandise like skateboard decks. Teespring estimated that non-apparel sales will exceed clothing by next year based on current trends, according to The Verge.

Insight:

Teespring's plans to integrate with TikTok will provide creators with another way to generate revenue from videos by selling customized merchandise. Its commerce platform lets users create a variety of gear, including T-shirts, hoodies, yoga pants and smartphone covers, that could appeal to hardcore followers looking to express their passion for their favorite creators.

The news is another signal that TikTok plans to diversify its business model beyond advertising by integrating more e-commerce elements — an expansion plan that has started to factor more significantly into talks of an acquisition for the app, which faces an uncertain future in the U.S.

As The Verge notes, TikTok is similar to Facebook's Instagram in limiting the ability of creators to monetize their content through ad revenue. While Google's YouTube lets creators share in ad sales through its Google AdSense sell-side platform, TikTok hasn't developed a similar offering. Instead, TikTok established a $200 million fund to supplement the income of budding creators, giving them greater incentive to keep developing content for the platform. Teespring can help creators monetize their efforts, having paid out more than $80 million to creators in the past two years, The Verge reported.

Exclusive merchandise has grown to play a larger role in the influencer marketing space as online content creators look to round out their personal brands and even launch independent businesses in categories like apparel. YouTube, whose creator community helped popularize the concept, earlier this summer introduced a feature that lets partners include a virtual "shelf" underneath their videos displaying their wares. In June, Instagram opened up its fledgling commerce platform to creators as well.

TikTok has undertaken its own efforts to develop into an e-commerce platform, aside from its roots in selling virtual currency that let users tip their favorite creators. After starting tests of an e-commerce feature that included shoppable video links last year, TikTok piloted an advertising format with a call-to-action button that links marketers to social influencers. Levi's was among the first brands to use "Shop Now" buttons that let consumers buy products shown in TikTok videos, TechCrunch reported. TikTok's evolution as a social commerce platform also included its first shoppable livestream late last month in a collaboration with Ntwrk, a home shopping network targeting Generation Z.

TikTok may be accelerating its e-commerce plans as an acquisition deadline approaches. In a surprise announcement last week, Walmart said it had teamed with Microsoft on the tech giant's bid to buy the app. The largest retailer in the U.S. said it valued TikTok's potential in e-commerce and advertising — two areas Walmart is also investing heavily in through its media network and the pending launch of Walmart+, a more direct competitor to Amazon.

It's unclear how soon a possible acquisition will be announced, though CNBC reported that a deal may happen as early as today, citing people familiar with the talks. TikTok faces the possibility of being banned in the U.S. because of national security concerns over its ownership by Chinese tech startup ByteDance.

The threat of a ban has forced ByteDance to consider a sale before TikTok loses access to the lucrative U.S. advertising market. But a potential deal faces a new hurdle from the Chinese government, which on Friday introduced restrictions on technology exports. ByteDance will need to obtain a license from China before selling TikTok's U.S. operations, CBS News reported.