How TikTok’s summer sale stacked up against Amazon’s Prime Day

Part of the issue may have been that TikTok’s sales event didn’t offer sharp enough discounts. The average discount on TikTok was 18% compared to the average discount during Prime Day, which was 22%, according to Salesforce. For its Deals For You Days event, TikTok helped subsidize the discounts for select brands, Modern Retail previously reported.

“Ultimately, neither retailers nor consumers participated heavily in TikTok’s version of Prime Day this year,” the Salesforce analysts wrote.

TikTok has had lofty ambitions to assert itself as a dominant e-commerce player in the States ever since it launched the US version of its e-commerce operations last September. Earlier this year, Bloomberg reported that the social media app was looking to grow the size of its online shopping business in the US tenfold to as much as $17.5 billion this year. At the same time, TikTok has pitched itself as a crucial platform for small business owners as it stares down a nationwide ban.

Yet, there are plenty of signs that TikTok has a way to go before it can fully challenge Amazon. According to sources that spoke with Modern Retail, a discounting snafu disrupted the beginning of the sales event, hurting some brands’ sales. More broadly, TikTok Shop is still new and not yet well-known enough as an app for e-commerce. The platform will also need to pull in more big-name brands that can afford to attract price-conscious consumers with steep discounts and, in turn, drive bigger orders.

“TikTok doesn’t have the supply yet to be able to offer many great deals, and most of the goods itself are on the lower end of the price spectrum,” said Juozas Kaziukėnas, founder and CEO of Marketplace Pulse. By comparison, big-name, expensive brands like Apple dominated Amazon’s home page during Prime Day, he added.

TikTok did not respond to a request for comment.

‘Apples and oranges’

One executive of a consulting agency that helps brands market and sell products on TikTok Shop, who asked to remain anonymous discussing private matters, said their clients’ Amazon sales versus their TikTok revenues was like “apples and oranges.”

For example, one client raked in millions of dollars in sales on Amazon during Prime Day. Meanwhile, that same merchant only made thousands in sales on TikTok over the same period.

A glitch with pricing on TikTok’s platform may have also dampened sales, the executive said. To register products for TikTok’s event, brands applied weeks in advance, they said. But on July 9, the first day of TikTok’s summer sale, the discounts weren’t showing up on the platform. In other words, products were displayed at full retail value. The discounts and coupons varied by product and brand. TikTok resolved the issue by the end of the first day in about seven hours, they said. It’s the latest sign of the relatively nascent platform’s growing pains.

Not everyone saw the TikTok sale as a failure.

Ana Barrett, director of social commerce at marketing agency LiveCraft, said that some of the company’s clients “had their best week ever on the platform” during the sales event.

To Barrett, TikTok is still in the process of building its reputation as an e-commerce platform. Shoppers While go to Amazon with purchase intent, TikTok generally drives revenue from users who are there to watch videos who then buy something on an impulse.

“While we’re seeing very high revenue on TikTok, and it’s not slowing down any time soon, I would say the average order tends to be a lot lower than what we see on Amazon,” said Barrett.

TikTok is Amazon’s friend and foe

In fact, the discoverability aspect of TikTok’s platform – where users chance upon products they didn’t know they wanted or needed – might have even been beneficial for Amazon.

Mentions of Prime Day dominated TikTok’s platform even as TikTok was hosting its own sales event. The hashtag “primeday” garnered 314 million views over seven days as of July 21.

Despite Amazon’s obvious dominance, there are signs the Everything Store is concerned about the heightened competition it’s facing from upstarts like TikTok Shop. During Prime Day, TikTok’s platform featured splashy ads promoting Amazon’s sales event in an apparent attempt to lure TikTok’s massive user base to its marketplace.

Amazon has also tried to replicate TikTok’s live-shopping elements on its platform, such as a shoppable news feed called Inspire. Still, a Stratably survey of 64 first-party sellers found that brands were unlikely to spend money on Amazon Live during Prime Day, concluding that brands are “bearish on the opportunity and focusing investments elsewhere.”

Research by eMarketer predicts that Amazon’s market of all online purchases made during the two-day period of its Prime Day sale will shrink for the third year in a row. That’s due to heightened competition from not only TikTok Shop, but other Chinese e-commerce newcomers like Temu and Shein, which also ran competing sales this month. Grocery stalwarts like Walmart and Target have rolled out summer sales events of their own, as well.

Looking ahead, “Amazon’s Prime Day strategy is really going to shift to defending the share they’ve carved out, while also looking for other white space throughout the year where there’s less saturation to inject some shopping behavior,” said eMarketer retail analyst Sarah Marzano .

In other words, TikTok on its own may not yet be enough yet to dull Amazon’s e-commerce crown. But the platform has and will impact Amazon’s revenues as part of a larger cadre of online shopping newcomers that have been shown up in recent years to challenge Amazon.

“TikTok still has a long way to go before it poses any meaningful threat to Amazon,” said Marketplace Pulse’s Kaziukėnas. “TikTok is really well suited for some categories — like beauty as well as inspirational shopping — but it’s not a place where you’re going to be buying your toothpaste from anytime soon.”