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.
—
Originally Posted January 4, 2024 – TikTok’s Focusing On Ecommerce This Year, Much To Amazon’s Dismay
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Finimize and is being posted with its permission. The views expressed in this material are solely those of the author and/or Finimize and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Join The Conversation
If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.