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A potential TikTok ban has raised concerns among small business owners on TikTok, who have found success and built sizable audiences without having to pay for marketing.

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When Aparna Singh first heard about a potential TikTok ban, she "immediately went into panic mode."

"With the majority of my sales coming through TikTok, I definitely was thinking, 'Is this going to be the end of my business?'"

Singh is the owner of a small business called Indian Goddess Boutique, which sells Indian-inspired jewelry and accessories. The social media app has been an "integral part" of her business, said the 33-year-old.

"I get 90% of my sales through TikTok. Everyday I try to post at least one video about my business. Days I do not post, I see a decline in website traffic and sales."

That is the same worry on the minds of some small business owners on TikTok, who have found success and built sizable audiences without having to pay for marketing.

Their concerns come after TikTok CEO Shou Zi Chew was grilled by lawmakers on the app's addictive features and whether data from U.S. users could end up in the hands of the Chinese government through its China-based owner, ByteDance.

Politicians have also threatened a nationwide TikTok ban unless ByteDance sells its stake in the app, a move China said it "strongly" opposed. The app is already banned on government-owned devices in countries like the U.S., Australia and the U.K.

Concerned about a potential ban of TikTok, small business owners told CNBC Make It why they think the short-video app should stay.

Like many other content creators, Singh started a TikTok account during the Covid-19 lockdown in 2020 and began advertising her business on it.

"I previously was focusing on Instagram to grow my business. Unfortunately the Instagram algorithm has changed so much over the years, I was barely getting any engagement," she explained.

On Instagram, she was "barely making any sales" maybe five to 10 orders a month, she said.

"Hashtags weren't helping. It just wasn't helping me reach the broader audience I needed."

But everything changed for Singh when she started using TikTok one video of her wearing a nose ring she sold went viral and sales "skyrocketed overnight."

In 2020 the year she started using the app she made $20,000 in sales. One year later, Singh said she made $350,000, while "spending $0 in advertising."

"That video showed me what product I should be focusing more on and what my customers really like," she added.

That's the beauty of TikTok, according to small business owners that CNBC Make It spoke to it has helped them find their customer and community "faster than any other platform."

"I love how the TikTok algorithm boosts your videos to more people even if you have a small following, as long as the content is relatable to who you are trying to reach," said Teena Ho, who sells stickers with original designs via @kawaiiflavor.

"When I created my TikTok page, my very first video reached thousands of views whereas on other social media apps, it would only be under 200 views."

Renee Powers, who runs Feminist Book Club, an online community and book subscription company, agreed. She said TikTok has been "brilliant" for identifying a niche audience and a foundation for growth.

How does a small brand like ours reach them without investing thousands of dollars in traditional media advertising? That's what TikTok helps us do.

Renee Powers

Entrepreneur, Feminist Book Club

"For small businesses, it is the overwhelming leader in discovering the perfect audience for your brand how does a small brand like ours reach them without investing thousands of dollars in traditional media advertising? That's what TikTok helps us do."

She said each time a TikTok video gains over 50,000 views, her business sees a "30% to 50% influx in traffic" on the company's website and followers on other social media platforms.

"It got to the point last summer that we had to upgrade our website host because our traffic was consistently much higher."

TikTok has raised fears over privacy and security concerns including claims that U.S. user data could fall into the hands of the Chinese government.

In April, TikTok was fined $16 million in the U.K. for misusing children's' data, after it allowed 1.4 million children under the age of 13 to use the app in 2020.

Despite the security concerns, small business owners have expressed frustration over the possibilities of a complete ban. Those that CNBC Make It spoke to said a ban is not the "appropriate measure" to safeguard the privacy of users.

"As a former National Science Foundation fellow in Electronic Security and Privacy, the privacy concerns are not lost on me That's not to say I don't have concerns about TikTok, but I do think the benefits outweigh the harm," said Powers.

"A ban on TikTok is not the answer to this issue. Rather, TikTok has become a scapegoat for data privacy concerns. Bytedance is not the first, nor will it be the last, company that misuses our personal data."

She added that if the government "throws the book at TikTok," it needs to do the same for all social media platforms.

Back in 2018, Facebook CEO Mark Zuckerberg was questioned over the social network's role in the 2016 presidential elections and how it handles data though no ban was proposed.

"What truly needs to happen is not a ban, but a nationwide user data protection policy that is platform agnostic and enforced by a dedicated independent organization," Powers said.

Bytedance is not the first, nor will it be the last, company that misuses our personal data.

Renee Powers

Entrepreneur, Feminist Book Club

Singh added: "If I was this concerned about this [privacy] issue, I would not have any social media apps or [use] technology."

TikTok is "helping millions of Americans be able to provide for their families in such a hard time in our economy. Why take that away?"

Without TikTok, small business owners say they will be at risk of losing growth momentum and that their company's income will be "taking a hit."

"We have a team of content creators that contribute TikTok videos, podcast segments, and blog posts," said Powers.

"Obviously, without TikTok, we would have to let go of our TikTok creators. Without the organic brand awareness that TikTok brings, we would have to sink money into more traditional marketing strategies."

Singh added: "I currently have one employee, my sister, so this ban will take a toll on my family. If the TikTok ban takes place and I will have to pivot my marketing in another direction."

For now, Ho and Powers are looking to Google-owned YouTube shorts a short video rival to TikTok as an option.

"Start making contingency plans now. Grow your email list. Let your followers know where they can find you if the ban is approved," Powers advised other small business owners on TikTok.

As for Ho, "building a strong community" online will be all the more essential.

"If TikTok were to be gone one day, your community will follow you to the next platform," said Ho."It's important not to put all your eggs in one basket."

The business owners also stressed the importance of not solely relying on TikTok for sales but all other platforms as well. That includes optimizing email marketing, ads on Google, Instagram and Facebook, Singh said.

"TikTok is not the only place to support small businesses. We're on Instagram, Twitter, Facebook, YouTube, Yelp, Google, Etsy," Powers added.

"TikTok may make it easy to discover new-to-you small businesses, but if you're passionate about shopping small, please put in the extra effort to find us."

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Excerpt from:
Benefits outweigh the harm: Worried about their livelihood, small business owners push back on potential TikTok ban - CNBC