What do TikTok and Walmart have in common?

Hello, it’s Spencer in Seattle. I spent the past few days at a large gathering of online merchants exchanging ideas and learning tricks of t [View in browser]( [Bloomberg]( Hello, it’s Spencer in Seattle. I spent the past few days at a large gathering of online merchants exchanging ideas and learning tricks of the trade. The usually Amazon-dominated affair was this year much more colorful, with TikTok Shop, Shein and Walmart all making a push. But first... Three things you need to know today: - SK Hynix is investing to [stay ahead in AI chips]( - Microsoft staffer warns regulators about [harmful AI content]( - Apple looks like it is the [most oversold in years]( Competition is a good thing The Prosper Show in Las Vegas, now an annual event, got its start focused exclusively on Amazon Marketplace sellers. And all indications are that Amazon.com Inc. will continue to dominate online sales in the US for the foreseeable future. American shoppers will spend nearly $500 billion on the platform this year, which represents nearly 40 cents of every dollar spent online, according to EMarketer Inc. That dominance is why the Federal Trade Commission filed a lawsuit last year seeking to address what it alleges amounts to monopoly power. But few merchants at the show talked about the FTC or count on the government to solve their problems, which many acknowledge include an over-reliance on Amazon. Competitors like Walmart Inc., ByteDance Ltd.-owned TikTok Shop and fast-fashion retailer Shein are in attendance to try and offer relief. Many sellers rely on Amazon for 90% or more of their sales and pay the tech firm commission, warehousing fees, packing and delivery charges, and more on top to advertise their products on the cluttered site. So the large booths from rivals generated a lot of traffic at the Prosper Show. Shein courted merchants with introductory offers of zero sales commission to compel attendees to try it. The Chinese firm’s also opening a new warehouse in southern California where it can offer order fulfillment services similar to the popular Fulfillment By Amazon. Walmart also offers fulfillment services and boasted about the 120 million unique monthly visitors to its website. Its marketplace largely mirrors what Amazon offers, and merchants are attracted by green new pastures offering a less crowded environment in which they can grow. One thing Amazon can’t offer: more than 4,000 Walmart retail locations in the US. That matters when about 80% of all US spending still happens in physical stores — and Walmart can use its online store to test interest for products it then distributes nationwide. TikTok also has a distinctive advantage: a stranglehold on people’s attention. It has a US audience of over 100 million and, where Amazon is known for its utility when people are searching for something, TikTok’s social elements are conducive to making it a platform for impulse purchases. Several merchants said they find it easier to be discovered and stand out on TikTok since people spend hours scrolling through videos. Whereas standing out on Amazon is mostly a brute-force affair favoring whoever spends the most on advertising. Most online merchants are pretty savvy and understand that consumers hop between all of these platforms. So even if sales are dominant on Amazon, they’ll use TikTok to promote a product knowing a lot of shoppers will then look for it on Amazon. They’re also looking for ways to bypass the big expense of Amazon advertising by directing people to the site from Google search and YouTube.  Online shopping is evolving into a more fluid process that doesn’t contain the entire transaction on one site or another. The winners will be those who carefully study the shopper journey, taking advantage of what each site offers and minimizing their cost exposure on others. It’s the kind of options online merchants have been craving for for a long time, even if most of their sales are still going to happen on Amazon.com.—[Spencer Soper](mailto:ssoper@bloomberg.net) The big story Ex-Google software engineer Linwei Ding was charged by the US Justice Department with stealing trade secrets, as he [allegedly transferred sensitive information from Google’s network]( to his personal email and cloud accounts. One to watch Almost nine out of 10 organizations from a recent Deloitte survey say their teams are communicating about the ethical use of AI with their workforce. Deloitte Technology Trust Ethics Practice Leader Beena Ammanath joins Caroline Hyde and Ed Ludlow to discuss the survey's highlights. Get fully charged While some Reddit users scoffed at the invitation to buy shares, the [number of people on the site continues to grow.]( Apple has stopped Epic Games from opening its own app store for [iPhone customers in the EU.]( The US government is urging allies including Germany and Japan to further tighten restrictions on [China’s access to chip technology.]( A Boston Partners fund manager sees Alphabet’s AI missteps as a golden opportunity for investors, noting its share price [doesn’t reflect its capabilities in AI.]( More from Bloomberg Get Bloomberg Tech weeklies in your inbox: - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage - [Game On]( for reporting on the video game business - [Power On]( for Apple scoops, consumer tech news and more - [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley - [Soundbite]( for reporting on podcasting, the music industry and audio trends - [Q&AI]( for answers to all your questions about AI Follow Us Like getting this newsletter? 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