Amazon Banks On E-commerce Growth Through Social Media Apps
E-commerce giant Amazon is turning to platforms such as TikTok, Facebook, Instagram and Snapchat to drive revenue growth within its e-commerce business.
The company held two years of negotiations with the CEOs of other tech giants, culminating in a partnership last year.
That partnership though came with dissent among Amazon’s ranks, according to media reports.
Amazon CEO Andy Jassy met separately with his Meta counterpart Mark Zuckerberg as well as Snap CEO Evan Spiegel and TikTok CEO Shou Zi Chew to discuss the partnership over a period of 24 months, according to The Information.
However, the internal opposition in Amazon was due to the fear among some executives that collaborations with other platforms would incentivise online shoppers to migrate to those apps and not buy products directly through Amazon’s home page.
In November, Amazon introduced an initiative called “Project Handshake” wherein it started to run ads on Meta-owned Facebook, Instagram as well as Snapchat that offered users a way to buy items from Amazon while staying within those apps itself.
Amazon dismissed concerns about its traffic being eroded, and instead said that the ads placed on social media apps do not divert customers away from Amazon’s app but instead make it simpler for users to buy products from the platform where they already are.
“Amazon is making it more convenient for customers to shop in social media by expanding in-app shopping,” an Amazon spokesperson told The Post.
Amazon’s move to partner with social media apps comes with risks, especially since those apps are developing their own e-commerce offerings.
TikTok has launched TikTok Shop, which allows users to purchase products directly within the app. Meta allows Facebook and Instagram users to set up stores on their pages.
Amazon partnering with these social media apps could also threaten its own lucrative A$59.07 billion-a-year advertising business.
Amazon charges merchants fees to boost the visibility of their products so that shoppers can browse them when typing in a search prompt on Amazon’s website. However, those ads aren’t visible to users of other apps who buy Amazon products without logging into the site.
Reports indicate that Amazon staffers who are working on “Project Handshake” plan to expand that initiative so that shoppers can find and buy products within videos and artificial intelligence-powered chat bots too.