TikTok’s rapid ascent in social commerce is drawing comparisons to Amazon’s flywheel strategy. The platform is taking multiple steps to achieve its goal of quadrupling its global ecommerce business to a potential $20 billion in annual merchandise sales through TikTok Shop.
“TikTok is really using Amazon’s strategy to try and dominate, not only ecommerce but pretty much everything. And that’s where this flywheel idea comes from,” our analyst Jasmine Enberg said on the “Behind the Numbers: Reimagining Retail” podcast.
Although the platform faces challenges establishing a shoppable ecosystem, TikTok’s growing creator community and its unique appeal to Gen Z—a cohort whose shopping habits and retailer loyalties are still forming—make it the platform to watch in the social commerce space.
The makings of a flywheel: Similar to the system fueling Amazon, TikTok’s flywheel consists of three elements—media, advertising, and commerce.
The multipronged approach: TikTok is determined to make social commerce work by experimenting with different innovations.
“TikTok is, in its favor, at the forefront of the cultural zeitgeist,” Enberg said. “And I think that will give it more reason for users to click the ‘buy’ button much more quickly than they do on other social media platforms.”
This was originally featured in the Retail Daily newsletter. For more retail insights, statistics, and trends, subscribe here.
One Liberty Plaza9th FloorNew York, NY 100061-800-405-0844