How purchasing TikTok would benefit Amazon
Amazon has indicated it is not currently trying to acquire the U.S. business of TikTok, but that doesn’t make it a bad idea.
In a recent interview with CNBC, Amazon CEO Andy Jassy denied earlier media reports that his company had placed a bid to purchase the U.S. business of TikTok from its China-based parent company ByteDance. This news comes as President Trump has extended the deadline for ByteDance to divest the video-focused social media app’s U.S. operations to June 19, 2025.
The continuing saga of whether TikTok will continue to operate in the U.S. dates back to legislation signed by President Biden in 2024 in response to longstanding concerns over possible ties between TikTok’s China-based parent company ByteDance and the Chinese Communist Party and possible risks to U.S. user privacy (ByteDance and TikTok have publicly denied the validity of these concerns).
The latest extensions signal that the Trump administration is interested in keeping TikTok open for business in the U.S. While the likely purchase price for TikTok’s U.S. operation has been estimated upwards of $40 billion (Elon Musk purchased Twitter for $44 billion in 2022), it still presents a worthy acquisition target for Amazon.
Here are three reasons why:
Keeping up with the Joneses
Amazon has video properties including the Twitch gaming streaming service and Amazon Live live shopping platform. However, it does not have its own general interest social video offering such as Google’s YouTube or Meta’s Instagram Reels.
These platforms, along with TikTok, are widely popular among consumers, especially highly coveted millennial and Gen Z shoppers. None of these social networks strictly serves as an e-commerce touchpoint, but all of them offer digital shopping functionality (such as the TikTok Shop social commerce offering).
Amazon is clearly interested in this type of video shopping model, as it recently removed a Tik Tok-inspired feature called Inspire which debuted on its shopping app in December 2022.
When customers saw an item in Inspire, they could shop for it in real time on Amazon. In a few clicks, customers could tap on a video or photo to see product details including average star rating and reviews, color and style options, and price, and then add it to their cart.
Simply purchasing TikTok would provide Amazon with an instant strong presence in an increasingly important niche where competing tech giants are establishing a foothold.
Build on an existing foundation
Another advantage Amazon would possess in a TikTok purchase is that it would not be starting from scratch. Since summer 2024, TikTok users have been able to purchase products from Amazon directly within the TikTok app.
This shopping experience is provided by Amazon through ads placed on TikTok and allows users to complete product purchases with Amazon while remaining in the TikTok environment.
Once accounts are linked, Amazon customers can complete a checkout with Amazon in a product ad without leaving the TikTok app. Users who choose to link their accounts in the U.S. see real-time pricing, Prime eligibility, delivery estimates, and product details on select Amazon product ads in TikTok.
[READ MORE: Amazon enables direct sales via TikTok]
All this means substantial e-commerce integrations are already in place between Amazon and TikTok, which would greatly streamline further back-end merging in the event of an acquisition.
Beat Walmart – in two possible ways
It’s no secret that when it comes to U.S. retail, Amazon and Walmart are the two alpha dogs constantly jockeying for position in the top spot. By purchasing TikTok, Amazon could gain a competitive edge on Walmart in two ways.
First, although Walmart’s name has not been recently floated as a potential suitor for TikTok, back in 2020 the discount giant was widely rumored to be pursuing a deal to purchase TikTok’s U.S. business in partnership with companies including Microsoft, Google and Oracle, which has been storing TikTok’s U.S. data on its servers since 2022 and been identified as currently interested in purchasing the app.
In addition to cutting off a possible Walmart acquisition or co-acquisition, Amazon would also be purchasing one of the discounter’s major social commerce partners. Walmart is heavily involved in hosting livestream events on TikTok and also sells items directly via TikTok Shop.
At minimum, an Amazon purchase of TikTok would put Walmart in an awkward position and potentially even move its rival off what is proving to be a very lucrative sales platform.
