With the general trend of e-commerce and social media integration, collaboration between platforms has become increasingly important.

Recently, Amazon and TikTok announced an important cooperation to provide users with a more convenient shopping experience. According to the agreement, TikTok users will be able to browse and purchase Amazon products directly in the TikTok app without leaving the app.

Previously, the rapidly expanding TikTok e-commerce and the largest e-commerce platform Amazon were undoubtedly competitors, and they also faced different difficulties: with the decline in consumer spending and the intensification of market competition, the growth of Amazon's e-commerce business has slowed down year by year; TikTok e-commerce has performed poorly after entering the Southeast Asian market and faced strict regulatory challenges in the United States.

Industry insiders believe that the cooperation between Amazon and TikTok is a win-win situation, which not only brings traffic and sales to Amazon, but also provides TikTok with a new commercialization channel and helps ease regulatory pressure. In short, it is likely to become a new development opportunity for TikTok and Amazon.

According to the announcement, users will be able to see Amazon's product recommendations on TikTok's "Recommendations" page and link their TikTok accounts with Amazon accounts through a one-time setting; after the accounts are linked, users can complete purchases directly on Amazon through product ads on TikTok, thereby achieving a faster and smoother shopping experience.

In addition, users can also view real-time prices, Prime eligibility, delivery estimates and product details in TikTok's Amazon ads, allowing users to quickly obtain key information while browsing short videos.

To use this service, TikTok users need to bind their profiles to Amazon accounts. However, TikTok emphasized the protection of user privacy in the cooperation, saying that users can choose to unlink from Amazon accounts at any time in TikTok's app settings.

This cooperation is an important attempt by TikTok on the road to commercialization, which will help it explore more profit models and enhance its industry competitiveness.

For Amazon, this brings a rich source of traffic - HerCampus's research found that 74% of Generation Z Internet users search for products on TikTok, and 51% prefer TikTok because the video format is more attractive.

However, it is still necessary to pay attention to the impact of this integration on TikTok's user experience and engagement, and whether it will significantly promote Amazon's sales through social channels.

For Amazon sellers, this cooperation does not currently mean that they can advertise directly on TikTok or promote products through TikTok influencers. The current cooperation is limited to Amazon's official advertising on TikTok. In the future, if Amazon's cooperation with TikTok deepens, it may provide Amazon sellers with more opportunities to promote products directly on TikTok.

After all, for Amazon, it is particularly urgent to find new growth points in the context of external competition and economic downward pressure.

As an e-commerce giant, although its business scale is already very large, its growth rate is slowing down. The second quarter financial report of 2024 showed that Amazon's e-commerce business had net sales of US$55.39 billion, a year-on-year increase of 4.6%, lower than analysts' expectations of US$55.55 billion, mainly because consumers tend to buy cheaper products in the context of economic downturn.

At the same time, shopping activities through social media platforms are growing rapidly. Market research firm Insider Intelligence predicts that by 2025, the size of the social e-commerce market will grow from US$67 billion in 2023 to US$100 billion, prompting Amazon to find new ways to grow.

In the past, Amazon has tried a variety of methods, including launching Spark, an Instagram-like application, and Inspire, a short video feature for TikTok, but these attempts failed to impress users or drive sales. For Amazon, cooperation with giants may be a better way out than going it alone.

Industry insiders believe that this cooperation is undoubtedly beneficial to Amazon. Justin Post, an analyst at Bank of America Merrill Lynch, pointed out that by leveraging TikTok's huge user base, Amazon can ease investors' concerns about competition from TikTok Shop. Since TikTok Shop's GMV currently accounts for 2.2% of Amazon's US sales, this strategic alliance may help Amazon regain some lost market share.

Amazon's needs are not limited to this. At the same time as announcing the cooperation with TikTok, Amazon also reached a similar agreement with Pinterest, allowing users to purchase Amazon products directly within the app without leaving the app. This is a deepening of last year's cooperation.

In April 2023, Pinterest had already established a strategic partnership with Amazon to attract more brands and users to the Pinterest platform to stimulate revenue growth, when Pinterest users were allowed to click on product links to jump to Amazon shopping.

Previously, Amazon also cooperated with Meta's social media platforms Facebook and Instagram, using a similar model to allow users to place orders for Amazon products directly within the social platform without switching pages and logging in and out of accounts. The industry believes that it is aimed at jointly responding to the impact of TikTok, TEMU and SHEIN.

In addition to investing in social e-commerce, in the face of market competition, especially the challenges of low-price retailers, Amazon also plans to launch a low-price store, focusing on selling unbranded products, mainly covering fashion, home and daily necessities, priced below $20.

Previously, Amazon also significantly reduced the sales commission of clothing products, especially clothing products priced between $15 and $20 and below. Industry analysts believe that this move can attract more low-price clothing sellers and enhance the competitiveness of the platform.