How TikTok Makes Walmart A Better Competitor Against Amazon

How TikTok Makes Walmart A Better Competitor Against Amazon

If you want to win in the 21st century digital economy, you must control or influence demand, not supply. In the industrial age economy, power went to gatekeepers of supply. Today, the empire builders are those that control demand. This is possible because digital supply is unbounded and unconstrained, making it largely not a factor.

If Walmart buys TikTok, it will get demand (users) – about 100 million Americans. Those users can be monetized over time. The reason why Facebook can wake up and enter into shopping, payment, etc is because it controls demand. TikTok will give Walmart demand which is very important in 21st century digital commerce. The most important feature in Facebook is this: people. Walmart needs an ecosystem where there are people, irrespective of whatever it wants to sell. TikTok offers a roadmap to that – and that explains why this move should not be confusing as we watch the world’s largest retailer enter a heated fray for a short video app. It needs those users to battle Amazon which is already a natural app for shoppers with its own demand!

TikTok recently said more than 100 million Americans use TikTok monthly. That’s 100 million more people who would be exposed to Walmart’s products and those of third-party sellers with which it works.

Walmart’s online business, which generated $24.5 billion last year, accounted for about 5% of its overall sales. Joe Feldman, analyst at investment banking firm Telsey Advisory Group, said Walmart’s online revenue is expected to increase to $35 billion this year.

TikTok’s owner is already pushing for more e-commerce on TikTok and Douyin, the Chinese version of TikTok. Walmart could continue that effort in addition to marketing its products on the service.

With the help of tech giant Microsoft, Walmart could also become a major force in online ad sales by selling ad inventory on TikTok. Walmart already sells ads on Walmart.com.

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One thought on “How TikTok Makes Walmart A Better Competitor Against Amazon

  1. How we view for-profit organisations matters a lot, whether you see them as purely transactional or something much bigger. Walmart isn’t satisfied with being seen as a mere retail giant, it also wants to exercise control, shape narratives and influence people’s lives in diverse ways; it’s a grand dream of every big organisation, only that some do not know how to achieve it.

    This brings me to what it would look like, if Aliko Dangote were to Arsenal FC, as speculatedbefore. I would have ranked it the most important and consequential piece of investment ever done by a Nigerian. Think of having a Nigerian as majority shareholder in a football club with global reach, such as Arsenal FC. There are things you should never miss out on, if there is ever any opening to close such deal! The gains of such investment outweigh their losses, if the owners know how to leverage on it to benefit other products and services in its ecosystem. Let me keep hope alive anyway…

    When these global behemoths jostle for this kind of deal, we need to be asking, why that? Because for ordinary people, there’s no connection, but when you view big organisations from the lens of control and influence, you begin to see the relationships.

    We will get there.

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