Finimize - 👑 TikTok wants Amazon's crown

What’s going on here?

TikTok set a New Year’s resolution to better its ecommerce business, but Amazon will be hoping the social media platform loses its ambition sooner rather than later.

What does this mean?

Getting the credit for creating viral dances that torment parents and make young kids rich is fun and all, but ByteDance’s TikTok is focused on more tangible wins for 2024. The social media phenomenon has plans to peddle a lot more merchandise through its built-in TikTok Shop, aiming to sell $17.5 billion worth of stuff in the US alone this year. That would put TikTok in direct competition with ecommerce go-to Amazon, as well as Chinese rivals Temu and Shein that count young, American shoppers as a major market.

Why should I care?

For markets: China’s coming for America’s crown.

TikTok Shop isn’t starting from scratch, though: the feature has already won over a solid bunch of shoppers and carved out a foothold in Asia. In fact, TikTok raked in nearly $20 billion from merchandise alone last year. But with the US threatening to ban the Chinese-based firm, Amazon may be able to cling onto its dominance. The same can’t be said for US tech giants like Tesla and Apple, which have been feeling the heat from Chinese electric vehicle maker BYD and smartphone brands Huawei and Xiaomi.

The bigger picture: Netflix and shill.

Amazon’s latest money-making idea might beef up its advertising revenue, but it’ll ruin the Sunday evenings of couch-loungers around the world. From early February, Amazon’s Prime streaming service will host video advertisements, a move that should bring in an extra $5 billion a year. And while that is just 1% of Amazon’s total revenue, streaming is the company’s smallest but fastest-growing division, so it’s a savvy move to monetize it while it’s in its, uh, Prime.

What’s going on here?

After a few weeks of blissful relaxation, fresh inflation data from Europe’s two biggest economies threatened to shake the region into action.

What does this mean?

France and Germany are pillars of the European economy, churning out everything from household car brands to world-leading hotels. That’s why investors watch the duo so closely: their success or failures often have consequences for the region as a whole. The latest reveal showed that prices in France and Germany were 3.7% more expensive than the same time last year, a bigger increase than the one from the month before. That’s not ideal for budget-strapped Europeans or the inflation-fighting European Central Bank, but because a slight uptick was expected, it’s not panic stations just yet.

Why should I care?

For markets: Investing during the winter blues.

It’s not just you struggling to get up off the couch: January tends to be a slow month for economic news, too. So with little to go off, investors have resorted to a strategy traditionally used at the start of the year: sell stocks that climbed high last year, like US tech, and buy ones that did less well and are now trading for cheap, like oil stocks. That’s so common that it’s known as the “January rotation effect”, but don’t count on it sticking. As soon as more concrete information starts revealing itself, investors will lean toward more forward-focused trends.

The bigger picture: Watch your back.

A lot will hinge on inflation this year. Many are expecting prices in Europe and the US to stay on the slope, paving the way for central banks to cut interest rates and give economies room to breathe. But it would just take one nasty surprise to send prices back heavenward, and if they stay higher for longer, central banks could be forced to lean into interest rate hikes again – essentially putting economies on the chopping block.