What’s going on here?
TikTok set a New Year’s resolution to better its ecommerce business, but Amazon will be hoping the social media platform loses its ambition sooner rather than later.
What does this mean?
Getting the credit for creating viral dances that torment parents and make young kids rich is fun and all, but ByteDance’s TikTok is focused on more tangible wins for 2024. The social media phenomenon has plans to peddle a lot more merchandise through its built-in TikTok Shop, aiming to sell $17.5 billion worth of stuff in the US alone this year. That would put TikTok in direct competition with ecommerce go-to Amazon, as well as Chinese rivals Temu and Shein that count young, American shoppers as a major market.
Source: Bloomberg
Why should I care?
For markets: China’s coming for America’s crown.
TikTok Shop isn’t starting from scratch, though: the feature has already won over a solid bunch of shoppers and carved out a foothold in Asia. In fact, TikTok raked in nearly $20 billion from merchandise alone last year. But with the US threatening to ban the Chinese-based firm, Amazon may be able to cling onto its dominance. The same can’t be said for US tech giants like Tesla and Apple, which have been feeling the heat from Chinese electric vehicle maker BYD and smartphone brands Huawei and Xiaomi.
The bigger picture: Netflix and shill.
Amazon’s latest money-making idea might beef up its advertising revenue, but it’ll ruin the Sunday evenings of couch-loungers around the world. From early February, Amazon’s Prime streaming service will host video advertisements, a move that should bring in an extra $5 billion a year. And while that is just 1% of Amazon’s total revenue, streaming is the company’s smallest but fastest-growing division, so it’s a savvy move to monetize it while it’s in its, uh, Prime.
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Originally Posted January 4, 2024 – TikTok’s Focusing On Ecommerce This Year, Much To Amazon’s Dismay
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