Walmart is an American company known for its big box retail stores selling every day goods, casual clothing, groceries and TVs. That is a far cry from the youthful culture of teens that flock to TikTok for entertaining dance videos, lip syncing performances and comedy routines.
But analysts who have watched the meteoric rise of social commerce in China — a mash up of social media activity and frenzied online shopping — say Walmart’s interest in TikTok makes perfect sense. The Chinese version of TikTok, known as Douyin, is one of several apps in the country that have tapped into the rapidly growing number of Chinese shoppers who like to buy stuff on social media platforms. Users of Douyin and Tencent-owned (TCEHY) rival Kuaishou, for example, can buy goods after watching short videos about products. They tune into live streams of influencers peddling everything from makeup to furniture. Users can ask influencers about products and get responses in real time, or they can click on steep discounts that are offered only in the apps. It’s like a modern version of shopping via QVC or the Home Shopping Network, but a lot more social and shrunk down to busy screens on mobile devices. «It’s entertainment plus shopping,» said Kitty Fok, managing director with market research firm IDC. «This is huge… it’s an extremely big market.» The feature is a big driver of revenue for Douyin and other apps, which make money off of advertising and commissions on products sold within the apps. Social commerce is growing fast Social commerce in China was worth $186 billion last year, more than 10 times the value of sales made in the United States, according to market research firm eMarketer. The Chinese market is expected to grow 30% this year to $242 billion. Walmart has already acknowledged the value of e-commerce when it comes to TikTok. The company said Thursday that its interest in the app stems from the way it has «integrated e-commerce and advertising capabilities in other markets,» and added that TikTok could bolster Walmart’s access to consumers. China’s success with social commerce hinges on the early and widespread adoption of advanced, mobile-friendly payment systems that the United States is at least three years behind in implementing, said Eric Schiffer, CEO of the Patriarch Organization, a technology-focused private equity firm.
