TikTok is poised to bring unfavorable implications for Amazon and other e-commerce platforms. The short-video app is reportedly considering the prohibition of external e-commerce links, including Amazon, as per a report from The Information. This measure is aimed at ensuring that TikTok users exclusively make purchases from products featured on the TikTok Shop within the platform.
The report also indicates that TikTok Shop is anticipated to incur a loss of over $500 million in the United States this year. The mentioned loss reflects the significant investments made by the company in areas such as recruitment, establishing a delivery network, and providing subsidies to merchants for discounts and free shipping. Earlier this month, TikTok officially unveiled its new e-commerce hub, TikTok Shop. However, reports suggest that TikTok Shop is not experiencing substantial traction at present.
Influencers on TikTok and other social media platforms often endorse specific products in their videos, earning commissions from e-commerce platforms like Amazon when viewers make purchases through their links. By prohibiting external e-commerce links, TikTok aims to prevent creators from redirecting users to rival shopping websites. TikTok Shop was introduced as a means to assist app creators in generating new revenue streams by selling exclusively on the TikTok Shop platform, rather than directing users to third-party sites or navigating additional fees and contractual obligations associated with platforms like Amazon or Facebook Marketplace.
Similar to Amazon’s “Sold by Amazon” program, TikTok’s online marketplace reportedly plans to offer a range of products from Chinese sellers, encompassing items such as clothing, kitchen gadgets, and electronics.
Currently, there is no information available about the timeline for implementing the ban. At present, TikTok Shop links enable users to directly purchase products from videos, while certain creators have TikTok Shop storefronts integrated into their profiles.
