TikTok’s e-commerce ambitions are accelerating, and the company is beginning to make itself the beneficiary of its marketing machine. A new report by the Information highlights the bet the company is making. Reportedly, it will lose $500m this year on its e-commerce ambitions.
Amazon third-party sellers and the company have used TikTok to drive users to Amazon product detail pages and to generate revenues. TikTok has generated its revenues primarily through advertising services and now wants to earn more by powering commerce for brands wanting to reach Generation Z customers. How can TikTok scale its e-commerce business quickly? By blocking links to e-commerce platforms such as Amazon and others.
We have seen this playbook before as TikTok’s Chinese version, Douyin blocked links to commerce platforms Taobao and JD.com. Douyin played the safety card when Chinese regulators allowed walled gardens in 2020.
What platform do Amazon sellers now use to drive engagement and audience to their products on Amazon? Pinterest or Reddit. The gap this decision leaves is significant.