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?

Archita Jajjoo answered.
10 months ago

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.