Walmart is teaming up with Microsoft in its bid for embattled and popular short-form video app TikTok. The US version of the app belonging to Chinese company Bytedance has multiple suitors and is being valued anywhere from USD20 to USD50 billion. TikTok has taken off in the US with its addictive short videos generated by users and often involving music. It would be a major addition to any company’s social efforts.
Walmart has a long-standing technology partnership with Microsoft going back to 2018, making them a natural joint venture for what is set to be 2020’s blockbuster deal. TikTok would offer a retailer like Walmart a massive engagement point with consumer behavior, a hugely monetizable and diversified new revenue stream via ads, and access to arguably one of the most successful consumer behavior algorithms around. TikTok’s effectiveness lies in its ability to rapidly adjust to viewing behavior, showing clips that are more likely to appeal to the viewer based on small nuances in viewing time, shares, likes, and follows.
Social commerce is coming to Western markets rapidly to match its dominance in Asia. This week Facebook announced more seamless shopping capabilities within its namesake app and Instagram. Brands should welcome this opportunity to have more creative mediums to connect with shoppers than what has previously existed on ecommerce platforms. Brands looking to make this trend a competitive advantage will develop skillsets and allocate investment for all relevant social channels, particularly platforms like Instagram and TikTok.
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