Amazon hopes that selling its goods through TikTok, Facebook, Instagram and Snapchat will revive sluggish e-commerce growth as US shoppers cut back on spending in a hyper-inflationary environment.
The Seattle-based online retailer held two years of high-stakes negotiations with CEOs of other tech giants that culminated in a partnership despite dissent within Amazon’s ranks, according to a report.
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, before the meetings, there was debate within Amazon about whether it was wise to partner with other sites because of fears it would encourage online shoppers to migrate to those apps and not buy products through the company’s homepage, The Information reported. .
Amazon shares have traded more than 3% lower in the past month after it reported slowing growth in online sales in the second quarter as consumers look for cheaper options amid stubborn inflation.
But supporters of the move argued that allowing shoppers to buy goods on Amazon through social media apps would spur growth in the company’s e-commerce sector.
In November, Amazon rolled out an initiative known as “Project Handshake” — where it began running ads on Facebook, Meta-owned Instagram and Snapchat that offered users a way to buy items from Amazon while inside those apps, according to Information.
An Amazon spokesperson dismissed concerns about traffic erosion, telling The Post that ads placed on social media apps do not divert customers from Amazon’s app, but instead make it easier to purchase products. where they already are.
“Amazon is making it more convenient for customers to shop on social media by expanding in-app purchases,” an Amazon spokesperson told The Post.
Amazon employees working on Project Handshake are planning to expand the initiative so that shoppers are able to find and buy products within videos and artificial intelligence chatbots, the report said.
The Post has sought companies from Meta, Snap and TikTok.
The move to sell Amazon products through competing sites is a radical departure for the online retail giant, whose corporate culture has long heralded the notion of making the company’s homepage a one-stop shop for e-commerce. .
Skeptics fear that allowing other apps to serve as a conduit for Amazon shoppers could erode Amazon’s dominance in the e-commerce space.
In the US alone, Amazon accounts for about 40% of all online purchases, according to eMarketer.
The irony of Amazon joining forces with Meta and TikTok is that those companies are also diving into e-commerce.
TikTok has launched TikTok Shop, which allows users to buy products directly within the app.
Meta allows Facebook and Instagram users to create stores on their pages.
Another potential setback for Amazon is the risk the newfound partnership poses to its $40 billion-a-year advertising business.
Amazon charges merchants substantial fees to increase the visibility of their products so that shoppers can browse them when they type in a search query.
But those ads won’t be visible to users of other apps who buy Amazon products without logging in, according to The Information.
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