TikTok And Shopify Finalise An E-Commerce Deal For Online Stores

TikTok Enters E-Commerce As Firm Finalises Deal With Shopify

Highlights:

  • Chinese business TikTok finalises deal with Canadian e-commerce platform Shopify
  • Shopify will enable online retailers to create “shoppable” videos ads with this deal
  • Walmart CEO explains how the deal would work

Canada based e-commerce giant Shopify, on Tuesday, announced a partnership with TikTok which will enable its over 10 lakh online retailers to create “shoppable” videos ads which will help drive more customers to the online stores.

TikTok which is still under scrutiny by the US government due to its Chinese ownership, is moving closer to becoming a marketplace for buying stuff.

The partnership was announced on Tuesday amidst the stalled negotiations for Walmart to buy a stake of 7.5% in the short video sharing application. Walmart’s planned investment is part of a government-forced deal which would rescue TikTok from a threatened ban by the President of the United States Donald Trump and advance Walmart’s ambitions for the world of “social commerce.”

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Doug McMillon, Chief Executive Officer (CEO) of Walmart told CNBC “If you’re watching a TikTok video and somebody’s got a piece of apparel or an item on it that you really like, what if you could just quickly purchase that item?” earlier in October.

McMillon added, “That’s what we’re seeing happen in countries around the world. And it’s intriguing to us, and we would like to be part of it.”

The Beijing-based company ByteDance which own TikTok has already captured a large share of social media marketplace via Douyin, its twin video sharing app for the Chinese market. Though buying and selling or products via social media platforms have not been taken up by the US market, Pinterest and Facebook-owned Instagram have made some progress.

Last year TikTok began making it easier for businesses to link to themselves from the app.

The Canadian e-commerce company, Shopify, said the merchants will be able to select which product they would want to promote following which the video ads will be automatically generated that could show up in a TikTok user’s video feed and drive customers to Shopify for checkout.

On Tuesday, TikTok, in a prepared statement, said that the Ottawa-based Shopify will be a “perfect partner to help us grow and expand our commerce capabilities globally.”

As of now, it remains unclear as to what the partnership would mean for TikTok’s negotiations with Walmart. Walmart and Shopify are on good terms, having teamed up against Amazon in June this year on a deal which enables Shopify’s small businesses to get listed on Walmart.com.

US President Donald Trump said over the summer he would shut down TikTok unless ByteDance sold its US assets to an American company, citing concerns about the potential for the Chinese government to spy on users’ data.

In September, ByteDance proposed to US authorities a partnership with Walmart, the California tech company Oracle and other American investors designed to relieve national security concerns about the app.

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Trump expressed support for the proposal, however, the officials are yet to formally approved it. Trump’s attempt to ban TikTok was also delayed until after the US Presidential election scheduled for next week as the company sued in federal court seeking a halt on the order.