Amazon teams up with TikTok, Pinterest to create shopping ads: Analysts predict $1 billion in revenue – Amazon.com (NASDAQ:AMZN)

In a move that is sure to delight investors and buyers alike, Amazon.com Inc AMZN is making a splash by collaborating with social media giants TikTok AND Pinterest.

According to BofA analyst Justin Post, these platforms will soon allow users to buy products directly from Amazon without leaving the app. The new partnerships aim to leverage Amazon ads with shopping capabilities, a significant step forward in digital commerce integration.

TikTok, Pinterest are becoming ‘shoppable’

Amazon has long been a pioneer in e-commerce, and its latest venture into social media is evidence of its innovative strategies. The post highlights that partnerships with TikTok and Pinterest mean users can connect their Amazon profiles to their social media accounts, gaining access to real-time pricing, shipping options, and Prime eligibility.

The development is part of Amazon’s broader strategy to boost its return on advertising investment, which could potentially increase gross merchandise value (GMV) by $1 billion through a 20 percent improvement in returns, according to the Post.

Also Read: Amazon vs Temu, Shein, TikTok Shop: Who is Winning the US E-Commerce Battle?

Easing Concerns About TikTok Store

While TikTok’s e-commerce platform, TikTok Shop, is growing at a rapid pace, integrating Amazon shopping directly into TikTok could provide a competitive advantage.

Post notes that by leveraging TikTok’s massive user base, Amazon is able to counter investor concerns about competition from TikTok Shop. Since TikTok Shop’s GMV now accounts for 2.2% of Amazon’s U.S. sales, this strategic alliance could help Amazon reclaim lost territory, Post adds.

Big opportunities, big numbers

Post maintains a Buy rating on Amazon, setting a $210 price target, which indicates an upside of 26.7%. With TikTok projected to capture 3.5% of the $300 billion U.S. digital ad market in 2024 and Pinterest set to have 1%, Amazon’s expanded presence on those platforms represents a significant growth opportunity, Post suggests.

His estimate suggests that if Amazon were to allocate about 5% of its $10 billion annual online advertising budget to such partnerships, the potential additional $1 billion in GMV could be transformative.

Slowly and steadily you win the race

While the growth may be gradual, the expansion into TikTok and Pinterest shows that Amazon is confident in the ability to maximize profits from social media.

Amazon’s expansion, which involves constantly testing innovative types of ads, underscores its desire to maintain its leadership position in an ever-changing digital environment, Post said.

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