TIK-ING A CHANCE
Walmart eyes vid-app stake with Microsoft
Walmart, known for selling large cereal boxes and cheap clothes, wants to own a fast-growing socialmedia app popular with lip-syncing teens.
The world’s largest retailer, led by CEO Doug McMillon, on Thursday confirmed it’s in the running to buy video app TikTok — and that it has partnered with Microsoft to pull off the deal.
A Walmart-TikTok pairing may sound as strange as some of the kooky videos on the popular platform, but news of the talks, first reported by CNBC, sent shares of Walmart up 4.5 percent on hopes that TikTok could help cultivate a new generation of Walmart shoppers.
“Walmart and TikTok is bizarre,” said Nii Ahene, chief strategy officer of Tinuiti, a digital-marketing agency. “But it gets Walmart in front of Gen-Z consumers who don’t watch television and have ad blockers on their phones.”
“The main thing to remember is that Tik Tok is ready to sell stuff,” added Brittain Ladd, a former Amazon executive. “You get an ad and click on it, and the sellers fulfill the order. Walmart can scale the e-commerce capability of TikTok, which is really just in its infancy and well on its way to becoming a media company as well.”
Walmart on Thursday also pointed to the potential to use TikTok to sell ads.
“We believe a potential relationship with TikTok US in partnership with
Microsoft [helmed by CEO Satya Nadella] could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses,” Walmart said in a statement. “We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators.”
“Walmart could advertise its own brand on TikTok
or allow its vendors to advertise there, splitting the fee with Microsoft,” added Edward Jones analyst Brian Yarbrough. “The margins on digital advertising are very high.”
TikTok has been in talks to sell itself in response to President Trump’s repeated threats to ban the app over its ties to China.
On Aug. 6, Trump issued an executive order that would shut down TikTok in the US unless it parts ways with its China-based parent company, ByteDance. The order was issued amid growing concerns that TikTok shares users’ personal data with the Chinese government.
TikTok has filed a lawsuit challenging the order, but Reuters reported Thursday the company is preparing for the possibility that it will have to shut down its US operation, including telling TikTok engineers in a memo this week to draw up plans.
On Wednesday, the company’s newly minted CEO, Kevin Mayer, abruptly resigned after just 100 days.
Mayer, who joined TikTok from Disney in May, decided to leave after it became clear he would likely not be running his own large company but rather a division within a tech behemoth, according to CNBC.