Amazon-Twitter Convergence
The world’s largest e-commerce retailer Amazon and social networking website Twitter have forged a strategic partnership.
The Financial Times (FT) reported on May 5 (local time), “Through the tie-up, consumers on Twitter who see a tweet with an Amazon product link will be able to drop it into their Amazon.com basket by replying with the hashtag #amazoncart in the US and #amazonbasket in the UK.” FT added that Twitter will emerge as a new shopping window for Amazon through the convergence of social media and E-commerce. But this service is only available in the US and UK.
The newspaper said that even though Twitter will not directly make profits from sales, other e-commerce companies may suggest a business alliance, or the social networking website can increase profits from advertising. Amazon is also likely to expand its customer base. In a video on the partnership, Amazon stressed, “No more switching apps, typing passwords, or trying to remember items you saw on Twitter.”
However, FT wrote that to date, social media has had only limited success in generating profits through ecommerce transactions. Moreover, it is too early to predict the success of this collaboration, since some users may be reluctant to reveal the details of their personal lives on social media, including information about shopping.
Sucharita Mulpuru, analyst at Forrester Research, noted, “I really don’t think it’s that necessary for Amazon, because the social networks are best for awareness and they certainly don’t have an awareness problem.” She continued by saying, “When many people were interested in a product, they were just as likely to search for it on Amazon as on Google, regardless of where they first saw it.” The analyst added, “Twitter is really a news and information stream, it’s not really a commerce stream. The experiments with purchasing that have happened to date on Twitter have not been wildly successful.”
Bloomberg reported that Sina Weibo, the Chinese equivalent of Twitter, and Alibaba’s e-commerce website Taobao already went into a similar business partnership, adding that Amazon and Twitter apparently took a page out of their Chinese counterparts’ playbook.
Last year, Sina Weibo showcased services where people can purchase products on Taobao via its website by linking Weibo accounts with Taobao accounts. Through this effort, Alibaba was successful in making products on Taobao more accessible to hundreds of millions of Weibo users. The Twitter of China was also able to generate profits from advertising. Alibaba made up 43 percent of Weibo’s advertising revenues over the holidays, according to a report by Bloomberg Industries.