Wal-Mart Wants to Buy Tik Tok; But why?

By purchasing Tik-Tok, Wal-Mart would be able to open a new way to sell to and interact with young consumers, who will of course become older consumers.


Tik Tok is looking for a buyer. The outrageously popular website, adored by teens and tweens, is on the market because the U.S. government has threatened to ban it, deeming it a portal for China (Tik Tok is owned by a Chinese entity, ByteDance) to eavesdrop on Americans.

Microsoft has been working to buy the company, and this week we learned that Wal-Mart wants in on the deal, but why? New York Times writer, Raymond Zhong, tries to answer that question in his article: “Why Does Walmart Want TikTok? Looking to China May Explain.”

According to Mr. Zhong, Tik Tok has a sister company in China, Douyin. The two companies are similar in that they are a platform for people to do short-form dance routines, lip-syncing, and more. Douyin, however, offers an e-commerce component that is highly successful. Mr. Zhong thinks Wal-Mart wants to copy Douyin and incorporate e-commerce into Tik Tok.

Here is how SupChina writer, Lucas Niewenhuis, puts it in his article, “The difference between TikTok and Douyin:”

Though it remains broadly similar to TikTok, Douyin has become more advanced than its global counterpart, particularly with respect to ecommerce. With three taps on Douyin, you can buy a product featured in a video; you can book a stay at a hotel after watching a video shot there; you can take virtual tours of a city’s stores and restaurants, get coupons for those establishments, and later post geo-tagged video reviews.

Once you read that, you can understand the attractiveness to Wal-Mart. By purchasing Tik-Tok, Wal-Mart would be able to open a new way to sell to and interact with young consumers, who will, of course, eventually turn into older consumers.

Wal-Mart has always impressed with its use of technology to stay ahead of its competition. Some of us can recall how the 20th-century Wal-Mart moved to satellite technology to improve efficiency and reduce costs in its supply chain. The result was they’re being able to dramatically undercut KMart (their long ago rival) on price and still make a profit.

If Wal-Mart does buy Tik Tok, look for a sea-change as the once-staid retail business continues to evolve into something practically unimaginable just twenty years ago.

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