It's All about Retail
Nov. 18th-20th,Shanghai, China

Amazon’s silence on TikTok is deafening

Amazon is seemingly involved in every major global technology trend – why isn’t it pursuing a deal with TikTok?

The saga of what tech giant will acquire or partner with the U.S. business of TikTok took a major turn this week with Oracle tentatively winning the competition. In a twist, Walmart, which had been part of a failed bid in partnership with Microsoft, has publicly stated it is still in talks with TikTok parent ByteDance.

Originating in China, TikTok has become a global phenomenon and is massively popular with Gen Z consumers. Chief Amazon rival Walmart has specifically expressed interest in TikTok’s advertising and e-commerce potential, and Oracle competes with Amazon in the cloud computing space.

Amazon is not one to surrender competitive ground to anyone, and yet has made no public overtures regarding TikTok’s U.S. business. Here are three possibilities for how the e-tail giant may be preparing a response to Oracle and/or Walmart obtaining a full or partial stake in TikTok in the U.S.

If you can’t beat ‘em…
Amazon has just as much to gain from TikTok as a digital commerce and advertising channel as Walmart, and just as much to offer as a provider of digital commerce and advertising content and services. While it is almost inconceivable that Amazon would ever enter any type of partnership with Walmart, the company does already collaborate as well as compete with Oracle in cloud computing.

Amazon could attempt to insert itself in the conversation about including a retail partner as a minority participant in Oracle’s TikTok deal. As I explained in a previous column, Amazon and Walmart have a long history of competing on the same turf.

If you build it, they will come
Amazon has launched multi-billion dollar efforts to establish a proprietary presence in fields ranging from satellites to autonomous vehicles to COVID-19 vaccines. Developing an in-house, short-form video platform is certainly a plausible project for the e-tailer.

Amazon could even use its existing Twitch livestreaming platform, or Amazon Interactive Video Service as a framework to build a TikTok-like social video offering. Amazon’s Lab126 innovation center is renowned as one of the tech industry’s best research and development departments, and may already be working on something.

Find a cheaper alternative
Another option Amazon could pursue is to simply purchase a TikTok competitor for less than the $20 - $30 billion investment experts have estimated may be involved in any U.S. acquisition or partnership deal. Other short-form video platforms, including Likee, Triller, Byte, and Dubsmash, have all been increasing in popularity and may be open to merging with Amazon.

Likee poses some of the same issues of involvement with China that TikTok does, and none of these platforms has the same level of market penetration or recognition as TikTok. But Amazon could put some of the money it would save on the deal toward promotion and branding (areas where it is highly effective) and still come out far ahead in terms of upfront investment.