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Why Shopify Stock Popped Today

By Joe Tenebruso – Aug 24, 2021 at 7:03PM

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A major partnership with a leading social media platform has investors excited.

What happened

Shares of Shopify (SHOP -0.78%) jumped 4% on Tuesday after the e-commerce leader said it would work with TikTok to launch new in-app shopping features. 

So what

The deal will allow a select group of Shopify merchants to add a shopping tab to their TikTok profiles and link directly to their online stores for checkout.

"Our community has transformed shopping into an experience that's rooted in discovery, connection, and entertainment, creating unparalleled opportunities for brands to capture consumers' attention," TikTok executive Blake Chandlee said in a press release. "TikTok is uniquely placed at the center of content and commerce, and these new solutions make it even easier for businesses of all sizes to create engaging content that drives consumers directly to the digital point of purchase."

People smiling while using social media apps on their mobile phones.

TikTokers will soon have more ways to earn money. Image source: Getty Images.

The new capabilities are already proving popular among TikTok's high-profile content creators. For one, Kylie Jenner is eager to use the new features.

"I have so much fun creating TikTok videos, and I love sharing posts of my fans using the products," Jenner said. "That's why I'm excited for Kylie Cosmetics to be one of the first to let customers shop directly on our TikTok!"

Now what

Social commerce is a rapidly growing market. Sales on social media apps will surge 34.8% to more than $36 billion in 2021, according to eMarketer. Partnering with the increasingly popular TikTok is a brilliant move for Shopify -- one that's likely to pay dividends for its merchants and shareholders alike.

"Creators are paving the way for a new kind of entrepreneurship where content, community, and commerce are key," Shopify President Harley Finkelstein said. "By enabling new in-app shopping experiences and product discovery on TikTok for the first time, Shopify is powering the creator economy on one of the fastest-growing social and entertainment platforms in the world."

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

Stocks Mentioned

Shopify Stock Quote
$43.06 (-0.78%) $0.34

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