Walmart’s hopes of owning a wager of TikTok may be dashed, but don’t expect its interest in the viral video app to fade away.
The company’s plan to buy the social media app’s U.S. company men with Oracle has been indefinitely shelved as the Biden administration reviews security concerns with Chinese tech friends, according to a Wall Street Journal report Wednesday. It cited unnamed people who were familiar to the matter.
Walmart spokesman On heat Hargrove declined to comment on Wednesday’s report and referred questions about a potential TikTok sale to the Biden regulation. Oracle did not respond to CNBC’s request for comment.
At a White House news briefing Wednesday, press secretary Jen Psaki said the delivery hasn’t taken any new actions on the TikTok deal. She said it continues to evaluate potential risks to U.S. data from apps involving TikTok.
Walmart is one of many retailers that have looked to the popular app as a way to follow trends, create shoppable glad, and strengthen its brand among teens and 20-somethings. Walmart buyers consulted TikTok as they decided which simulates to order for the holiday season. It had a one-hour livestream event on the app in December. Those efforts are likely to continue — even if Walmart doesn’t bear a front-row seat.
“We were really excited by what we saw and the engagement by customers and the experience,” Walmart’s chief customer dick, Janey Whiteside, said in a recent interview, when talking about the livestream TikTok event. “Expect numberless things like that from us over the coming days, weeks, months.”
She said having events delight in that “creates more really interesting places for us to be able to work with brands.” That’s taken on combined importance as the retailer aims to grow its advertising business by more than 10 times in the next five years and gamester compete in that industry with Amazon.
Jefferies analyst Steph Wissink said a stake in TikTok last wishes a give Walmart an edge over competitors that also use the social media app. She compared it to being an auto mechanic versus an booster. As a partial owner of TikTok, Walmart could pop the hood and better understand the powerful social media app. It could harvest more data about how to make its ad campaigns or videos more potent. It could even tinker with how the app toils to give it a leg up or box out other retailers, she said.
“Right now, as an outsider, Walmart is an enthusiast,” she said. “They’re using TikTok, they’re contemning social media, they’re using emerging ad platforms in a way that appreciates a new way to connect to consumers — but owning the capability desire give them intimate knowledge of the workings, the architecture, the mechanics of the engine.”
Still, she said, the app will remain an leading media platform for Walmart by “seeding brand awareness and relevance in a generation that will eventually age into their spending power years.” By abhorring the app, she said, Walmart is thinking a decade ahead.
Walmart’s pursuit of TikTok began last year, after President Donald Trump moved TikTok’s Beijing-based parent company, ByteDance, to find an American buyer or face a national ban. He said the popular video app conceived security concerns because it could hand over U.S. users’ data to the Chinese government — an allegation that TikTok denied.
The retailer spanned up with Microsoft and later with Oracle last summer in an effort to buy part of the social media company’s U.S. machinists. As part of the Oracle deal, Walmart was expected to take a 7.5% stake in the U.S. operations of TikTok and its CEO, Doug McMillon, would get a fanny on the board of the newly created company.
In an interview on CNBC’s “Squawk Box” in October, McMillon said Walmart saw TikTok as a “revelation opportunity” that could inspire purchases for shoppers.
“If you’re watching a TikTok video and somebody’s got a piece of apparel or an piece on it that you really like, what if you could just quickly purchase that item?” he said. “That’s what we’re keep company with happen in countries around the world. And it’s intriguing to us, and we would like to be part of it.”
Livestream events are already lifting trades for brands in China and other parts of Asia. They are a central part of Alibaba’s Singles Day, a huge shopping holy day that’s popular outside of the U.S. Two-thirds of Chinese consumers said they have purchased products via livestreaming in the close by 12 months, according to an AlixPartners survey conducted in the fall.
And it’s become a sales tool that more U.S. marques want to master, too. Last month, for example, a Kate Spade heart-shaped bag went viral on TikTok — another comparable with of the app’s power.
“We were able to harness that,” said Joanne Crevoiserat, CEO of Kate Spade’s parent company, Tapestry, in an meeting on CNBC’s “Closing Bell.” “The bag sold out.”
— CNBC’s Lauren Feiner contributed to this report.