Technology
Walmart's ad sales could leap rapidly if TikTok 's offer was successful.
Walmart Inc could become an online advertisement pioneer if its bid to buy famous short-form TikTok video app goes through, analysts said on Friday.
The planned acquisition, in collaboration with Microsoft Corp, would allow the world's largest retailer to compete efficiently with Amazon.com Inc., Facebook Inc. and Google Alphabet Inc. for social media eyeballs, targeting consumers via virtual and physical distribution platforms.
TikTok is on sale while the Chinese-owned business is under fire from the Trump administration as a possible national security risk due to the large volume of private data the software compiles on US users.
Walmart, which for the first time last year set up its marketing business with major consumer products corporations and advertisement agencies, said Thursday that it was "confident" that it will compete with the U.S. The needs of TikTok consumers and the interests of U.S. regulators are fulfilled.
Owner of TikTok ByteDance intends to ink a contract by Sept. 15, people familiar with the matter told Reuters on Thursday.
Walmart can see a very fast growth in advertisement spending, said Scott Smigler, founder of the Unique Concepts e-commerce marketing agency.
From a company point of view, it's no brainer because of Walmart's scope and the big change we 're seeing right now from offline to online (spending). ... For all of our qualifying brands and stores, we 're sure to want them on Walmart.
Walmart reported the highest quarterly uptick in online revenue, as the unparalleled surge in demand experienced by big-box stores at the height of coronavirus lockdowns stayed high even as restrictions eased.
Walmart does not exclude money from paid advertisements for items advertised on its website. Yet internet advertising yields much higher margins than direct purchases, and advertisement revenue is increasing as the retailer increases investment in the region.
