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Amazon and Snapchat Team Up To Take on TikTok
November 15, 2023
On Monday, Amazon announced a partnership with Snapchat to enable direct in-app purchases for U.S. users. This strategic move aims to tap into the growing trend of social media-led shopping.
“The battle with TikTok is on, and the partnership will help Amazon compete in the more impulse-driven, serendipitous type of shopping that happens on social media.”
Jasmine Enberg, a principal analyst at Insider Intelligence, via Reuters
Along with its alliance with Snapchat, Amazon also has partnerships with Meta Platforms and Pinterest. These collaborations are anticipated to further boost Snapchat’s advertising business, which reported better-than-expected earnings last month.
As per the alliance, customers will be able to purchase directly from Amazon ads on Snapchat without leaving the app. Additionally, users will be able to access real-time pricing, Prime eligibility, delivery estimates, and product details for advertised Amazon products.
“For the first time, customers will be able to shop Amazon’s Snapchat ads and check out with Amazon without leaving the social media app. In-app shopping with Amazon is available for select products advertised on Snapchat and sold by Amazon or by independent sellers in Amazon’s store.”
Amazon spokesperson via Investors.com
As a result, Snapchat’s shares demonstrated a noteworthy surge, escalating 7.5% to finish the trading session at 12.15 on Tuesday.
This positive trend follows the company’s first quarter this year to record annual sales growth. As per the earnings report released on Oct. 24, Snapchat posted a 5% year-over-year increase in revenue for the third quarter.
Since the release of the earnings report, Snapchat’s shares have seen a remarkable upswing of 23% leading up to Tuesday’s trading session, and that’s before factoring in the boost from the recent Amazon partnership.
However, according to the IBD Stock Checkup, Snapchat retains a somewhat low IBD Composite Rating, standing at 67 out of 99. The shares also possess an EPS Rating of 15 out of 99, implying somewhat lackluster earnings growth.
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