- Walmart CEO Doug McMillon said the retailer wants to own part of popular video app TikTok because it sees social media as a huge business opportunity and a powerful way to reach customers.
- The deal, which includes Chinese parent company ByteDance and Oracle, is not yet finalized and must get government approval.
- He said the retailer is talking to ByteDance about ways to make "social commerce" easier and more appealing for American customers.
Walmart CEO Doug McMillon said Thursday that the retailer wants to own part of popular video app TikTok because it sees social media as a huge business opportunity and a powerful way to reach customers.
In an interview on CNBC's "Squawk Box," he said Walmart sees TikTok as a "discovery opportunity" for consumers to find merchandise they want to buy.
"If you're watching a TikTok video and somebody's got a piece of apparel or an item on it that you really like, what if you could just quickly purchase that item?" he said. "That's what we're seeing happen in countries around the world. And it's intriguing to us, and we would like to be part of it."
Walmart has tentatively agreed to a purchase 7.5% stake in TikTok's U.S. operations, and McMillon would serve as one of the five board members of the newly created company — but the deal must still get government approval. As part of the business transaction with TikTok's Chinese parent company, ByteDance, Oracle would become TikTok's cloud provider and a minority investor with a 12.5% stake.
He said the retailer is talking to ByteDance about ways to help make "social commerce" easier and more appealing for American customers — a trend that's already caught on in China. By working together, he said the companies could speed along the shipping of a certain item once a TikTok user chooses to buy it.
"If you click on that garment that you want to buy and it takes two weeks to get there, that's not a very good experience," he said. "So how could we help with a supply chain, a back-end that makes the whole experience terrific, not just the moment that you buy the item."