InvestorQ : Why is Wal-Mart getting interested in buying into Tik Tok?
Rashi Mehra made post

Why is Wal-Mart getting interested in buying into Tik Tok?

Answer
image
Archita Jajjoo answered.
10 months ago
Follow

The latest to join the fray to buy Tik Tok US operations is Wal-Mart. This has been necessitated after Donald Trump ordered Tik Tok to sell its US operations due to security related issues. The US has been a fast growing market for Tik Tok, a Chinese play.

It may look like a marriage of unlikely partners. For example, Wal-Mart is a old world company with customers who are typically in the wrong side of the 40s. On the other hand, Tik Tok is typically a Generation Z platform. How do they really fit in?

Wal-Mart is likely to bid alongside Microsoft for the US operations of Tik Tok. Wal-Mart believes that the combination could be a potent competition to Amazon, which includes the Prime offering. This will position Wal-Mart as a ecommerce *** social commerce company.

The Tik Tok deal will allow Wal-Mart move beyond its traditional brick-and-mortar roots. One example was there in the Flipkart deal in India but it needs a lot more such deals. Tik Tok could really catapult Wal-Mart into the big league of digital players in the world.

There are synergies too. The purchase of Tik Tok will offer Wal-Mart access to a large, young and loyal group of users. Wal-Mart could even look at social selling where it just provides the platform and does not hold the inventor in its books.

For Wal-Mart, the Tik Tok deal could be more about combining social engagement with commerce. If Wal-Mart and Microsoft combine to take over Tik Tok, they can surely give a run for money to Facebook. Wal-Mart knows little about the 265 million weekly shoppers.

Above all, Wal-Mart realizes that the days of the traditional retailer may be numbered. Like any good old fashioned businessman, it is adapting fast.

1 Views