It is possible that Walmart will not be able to purchase part of TikTok, but will not stop using this service to promote products.
The deal in which Oracle and Walmart had planned to buy the service TikTok from the Chinese company ByteDance was postponed at U.S. President Joe Biden's initiative. The issue of user data security was again raised. Fears have been raised that American users' data could be threatened because Chinese companies would have direct access to it. Negotiations are now underway between the U.S. authorities and ByteDance to discuss ways to ensure security.
However, despite the difficulties with the TikTok platform's takeover, Walmart plans to continue using it to promote products. The former CEO of the chain Doug McMillon has already stated that he sees in social networks a vast opportunity for businesses to attract customers. He said Walmart is now discussing with ByteDance ways to make "social commerce" more straightforward and appealing to American customers. This trend has already caught on in China. The companies can make it easier and faster to buy an item once a TikTok user decides to buy it.
Let's also not forget that short video services are not just another advertising platform but an investment in the coming decades. After all, teenagers who would actively use TikTok today, including product selection, would likely remain regular visitors of Walmart stores in the future.
If the takeover deal does occur, Walmart will have many advantages over competitors, using TikTok for promotion. Analysts draw an analogy between an ordinary car owner and a car mechanic, who is much better versed in the vehicle's structure and can use his knowledge to improve it.
Walmart had the idea to buy TikTok last year when President Donald Trump's administration demanded that ByteDance find a buyer for the U.S. division of the service. Initially, the supermarket chain tried to team up for the purchase with Microsoft, and then its partner became Oracle. As part of the deal, Walmart is expected to receive a 7.5% stake in the U.S. division of TikTok. Doug McMillon will take a seat on the board of the newly created company.
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