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Shopify partners with TikTok, Amazon to boost merchant appeal and revenues

The news: Shopify is giving merchants the ability to integrate with TikTok Shop, per The Information, which could help mitigate the blow from the pending shutdown of all Shopify-integrated storefronts on TikTok in early September.

  • Merchants will be able to access order and customer information from TikTok sales via their Shopify dashboards.
  • But beginning on Sept. 12, Shopify sellers will no longer be able to sync their product catalogs to TikTok and feature items in a dedicated tab, and instead will have to switch over to TikTok Shop.

Finding common ground: Shopify’s TikTok Shop partnership marks the company’s second tie-up with a major competitor in less than a week, after earlier inking a deal with Amazon to allow its sellers to use Buy with Prime.

  • While Shopify initially saw Buy with Prime as a threat to its business model, the two companies reached an agreement that will enable merchants to utilize Amazon’s fulfillment system while payments will go through Shopify’s checkout service.
  • The move allows Shopify to retain access to purchase data and collect transaction fees, formerly a key sticking point in its opposition to integrating the service.
  • Shopify’s integration with TikTok Shop comes with fewer immediate revenue benefits, but enhances its value with sellers looking to experiment with the platform, which could help with user retention and acquisition.

Looking ahead: The partnerships with Amazon and TikTok could help rejuvenate merchant growth on Shopify’s platform, which is flagging as the early-pandemic ecommerce boom subsides.

  • Retail ecommerce sales on Shopify will grow 7.9% this year, slower than total US ecommerce sales.
  • But Shopify will have to tread carefully: Both companies pose significant threats to its business, which could make the long-term costs much weightier than the benefits.

First Published on Sep 1, 2023