Walmart Joins TikTok Drama, Teams Up with Microsoft
TikTok’s dramatic sale stirred technology news since Microsoft expressed its interest in buying its US operations. Today, supermarket corporation Walmart teams up with the Redmond-based tech firm.
Time is running fast for the Chinese-owned app. President Trump’s 90-day reprieve to sell TikTok off to an American firm is due to expire in November.
Should it fail to settle, TikTok will have a ban from operating in the US indefinitely.
On Thursday, its chief executive resigned after just two months of being in office. He said that the incumbent political environment greatly affected his role as the leader of global operations.
Nevertheless, he assured TikTok employees of the company’s bright future ahead with the sale. Many speculate that Microsoft, now teamed with Walmart, are the frontrunners of the deal.
Recently, experts note that the sale could reach a hefty sum of $30 billion. This is not a problem for the supermarket and modern technology firms, with their high market capitalization of $387 billion and $1.73 trillion, respectively.
According to the retail corporation’s representative, they expect that the high-profile partnership will meet American TikTok users’ expectations while satisfying regulations imposed by the US government.
Upon the announcement, Walmart shares hit $139, its 52nd week high to date. At the end of the regular session, it further hiked up by another 5% reaching $136.63.
The partnership came at the right time as it seeks a competitive advantage over Amazon, its e-commerce rival, which launched Amazon Halo and Amazon Fresh recently.
Consequently, the Arkansas-headquartered firm will soon launch Walmart+, which will directly compete Bezos’ Amazon Prime, signifying its interest in more technology ventures.
This will be a subscription-type service, including original TV shows and movies, similar to its opponent.
Walmart’s E-Commerce Reshuffle
Recently, Walmart shared its impressive growth in e-commerce after recording an outstanding 97% sales growth in digital business. This is against the retail industry’s 27% total increase in non-store sales.
The US retail giant is up by 9.5% from the industry’s average of 6.2% accounted by discount stores and warehouses.
The pandemic imposed a reduction in mobility, which drove growth in the sector, encouraging people to stay at home.
The biggest pullers are from the field of computing and entertainment, particularly television sales. Sports equipment also scored impressive sales.
On the other hand, Walmart Inc. divested two e-commerce acquisitions to focus more on its central platform.
Included in the list are online footwear store Shoes.com to CriticalPoint Capital.
Meanwhile, Bare Necessities, a lingerie and loungewear online selling retailer, will be given to Delta Galil Industries Ltd effectively last August 25.
The retail giant will continue to sell the two offloaded websites’ products, but only through its third-party marketplace site. The platform carries products from different merchants selling products online.
As it just dropped some smaller ventures, the TikTok acquisition will be leveraged as an omnichannel strategy to reach and serve its US customers better. This will also play an imperative role in its advertising business.
No-one is sure yet on how the US operations for TikTok will turn out. Still, the two juggernaut technology firms have a more significant competitive edge now that they established a powerhouse partnership.
