Recently, it was reported that global e-commerce giant Amazon has signed a cooperation agreement with TikTok, allowing TikTok users to purchase Amazon products without leaving TikTok. It is reported that users will see Amazon's product recommendations in the "For You" channel of TikTok, and associate their TikTok account with their Amazon account through settings. They can then directly purchase Amazon products on this short video platform, and the account association can be canceled at any time. In addition, users can also see product prices, Prime user benefits, estimated shipping prices, and product details in TikTok's Amazon ads.
On August 12th, it was learned that TikTok released a blog post on its official website stating that this cooperation can provide TikTok users with a "seamless and fun shopping experience". TikTok said, "We are delighted to collaborate with Amazon to provide a seamless and fun shopping experience. We look forward to supporting our community to keep them inspired and enjoying themselves." An Amazon spokesperson stated that the program aims to make shopping on social media more convenient for customers.
One is a global e-commerce giant, and the other is a rising star of overseas short video. This cooperation is regarded as "strong cooperation". Some insiders said that this cooperation is similar to the original domestic Taobao and Tiktok communication, and has changed from the original competitive relationship to a partner. It is reported that in recent years, many Amazon sellers have entered TikTok because TikTok has a traffic entry of billions, and many Amazon products have become popular on TikTok, which in turn drives the sales of products on Amazon.
The reporter noticed that before the two platforms announced their cooperation, some cross-border e-commerce practitioners had already started researching how to output content through content platforms such as TikTok and convert it into a transaction operation model on cross-border e-commerce platforms.
May potentially alleviate local regulatory pressure in the United States
Amazon's cooperation with large social platforms is not the first time. Last November, Amazon established similar partnerships with Meta's "Facebook" and Instagram. When users click on Amazon ads on Facebook or Instagram, they will see a streamlined version of the Amazon product page with a "Buy with Amazon" button. Users can shop on Facebook, Instagram, and Amazon ads and complete checkout without leaving social media applications. At that time, the goal of this collaboration was to combat the competition between emerging platforms such as TikTok and Temu for traffic and orders. At the same time, the market expects that cooperation will significantly increase the e-commerce conversion rate of Meta platform social traffic.
For Amazon, a traditional e-commerce giant, the benefits of this cooperation with TikTok are obvious, as it can introduce more effective traffic to the platform, especially for the purchasing needs of young consumers. Amazon's recently released Q2 financial report shows that its net sales were $148 billion, a year-on-year increase of 10%; Net profit of 13.5 billion US dollars, a year-on-year increase of 100%. Among them, the net sales of e-commerce business reached 55.4 billion US dollars, a year-on-year increase of 5%. This quarter's e-commerce business did not meet expectations. In response, Amazon executives stated during a conference call that shoppers remain cautious in their spending due to the impact of the economic environment. Consumers are buying cheaper goods, which means the average selling price (ASP) of the products sold is lower.
However, will the cooperation between the two parties affect TikTok's own e-commerce closed loop? For this reason, some analysts have pointed out that TikTok's choice to cooperate with Amazon not only compensates for its own shortcomings in the supply chain, but also opens up new commercial monetization channels. Amazon is an e-commerce platform in the United States, and TikTok's cooperation with it is expected to further consolidate its position in the US market, and more importantly, may alleviate some regulatory pressures from the local market.
In early August, it was reported that the US Department of Justice sued TikTok for violating internet privacy laws by collecting children's data. The lawsuit filed by the US Department of Justice in California District Court claims that TikTok allows millions of children under the age of 13 to create accounts without their parents' knowledge or consent. The indictment states that although TikTok reached a settlement with the Federal Trade Commission (FTC) in 2019 regarding children's privacy issues, the company did not prohibit such behavior. TikTok denies the aforementioned allegations, stating that "we do not agree with these allegations, many of which involve past events and practices, and the facts are inaccurate or have been resolved," a TikTok spokesperson said.
As of August 9th local time, Amazon's stock price closed at $166.94 per share, up 0.96%, with a total market value of $1.8 trillion.