Amazon has its own shoppable content feed which shows videos and images similarly to Instagram and TikTok.
Ina Fassbender/AFP via Getty Images
Amazon.com
is partnering with social-media platforms to enable direct purchases from apps such as
Snapchat
and Instagram. It’s a riposte to the growing e-commerce power of TikTok.
Amazon
(ticker: AMZN) recently struck a deal with
Meta Platforms
(META) to test a feature allowing users to link their Facebook and Instagram accounts to Amazon, enabling shoppers to buy products without leaving the apps.
Now Amazon has reached a similar arrangement with Snapchat-owner
Snap
(SNAP).
“In-app shopping with Amazon is available for select products advertised on Snapchat and sold by Amazon or by independent sellers in Amazon’s store,” an Amazon spokesperson told Barron’s on Tuesday.
Snap shares were up 9.3% in early trading on Tuesday. Amazon shares were up 2.9% and
Meta
was up 1.5%.
The deals on the face of it look counterintuitive. Amazon and Meta (and to a lesser extent Snap) are rivals for advertising dollars and shoppers’ eyeballs. Meta’s Facebook has its own marketplace platform, although it is less of a destination for large sellers than Amazon. Meanwhile, Amazon has its own shoppable content feed which looks a lot like Instagram, called Inspire.
However, the key to the partnerships is they help both sides marry their strengths to take on the threat of TikTok, the video-sharing app owned by China’s ByteDance.
TikTok launched its own U.S. e-commerce platform in September, meaning it can now act as a combined advertising-and-sales channel. It’s part of a push to more efficiently translate its growing advertising weight into revenue.
Privately owned ByteDance doesn’t disclose detailed financial figures for TikTok but Insider Intelligence has estimated the video-sharing app’s net advertising revenue more than doubled in 2022 to $9.89 billion. That still leaves TikTok as a small player—Meta made more than $113 billion in revenue form advertising in 2022 while Amazon brought in $37.7 billion.
However, market-share gains now could translate into outsize revenue and profit in the future. Global advertising spend is expected to top $1 trillion for the first time next year, with spend accelerating 8.2% in 2024, compared with 4.4% this year, according to research-firm WARC.
TikTok has shaken up the social-media landscape in the U.S. and would like to do same to e-commerce. U.S. tech companies look to be changing their game in response.
Write to Adam Clark at [email protected]
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