Walmart is partnering with Microsoft to make a bid for the U.S. operations of short-form video platform TikTok. The offer will go up against acquisition bids by other major companies, possibly including Oracle, according to CNBC. If successful, the deal could help Walmart better position itself to merge its retail operations with media capabilities.
“The way TikTok has integrated e-Commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets,” said Microsoft in a press release. “We believe a potential relationship with TikTok U.S. in partnership with Microsoft 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. We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators.”
The deal also could represent the next step in Walmart’s fight to gain parity with Amazon. Walmart is launching the Walmart+ subscription service to compete directly with Amazon Prime, but it will (at least initially) only match Prime’s fast and free delivery. A media-focused acquisition like TikTok could help Walmart break into other media, as well as appeal to new younger customers.
“Walmart could be copying the moves of Amazon (i.e. acquire content rights) and are viewing TikTok as a content and engagement vehicle that can eventually help them reach a new demographic that isn’t necessarily a Walmart customer of today — i.e. teens and Millennials,” said Amit Shah, Chief Strategy Officer and US General Manager at VTEX in commentary provided to Retail TouchPoints. “Additionally, having control over TikTok’s vast user base would allow Walmart to reach new audiences across new channels.”