TikTok's current head explains how Walmart fits into its recent e-commerce push
- Though many saw Walmart as an unusual potential buyer for TikTok, the social media app's interim head Vanessa Pappas said there are synergies between the two companies.
- TikTok began testing new social commerce features last year by allowing some users to add links to their profiles and videos.
- TikTok is under pressure to sell to an American company before Sept. 20 when an executive order banning U.S. entities from transactions with the app would go into effect.
Following CNBC's report Thursday that Walmart is teaming up with Microsoft in its effort to buy TikTok, the social media app's interim head Vanessa Pappas said the social media upstart and retail giant already have a common interest.
"For us, we've been really focused recently on rolling out some e-commerce features. We've been providing that for our creator community as another way for them to earn a livelihood," Pappas said in an interview on CNBC's "Squawk Box" Friday. "I think there's a lot of different synergies there."
TikTok began testing new social commerce features last year by allowing some users to add links to their profiles and videos. Levi's was among the first retail brands to use TikTok's new "Shop Now" feature to direct users to merchandise. The company partnered with influencers to spread their message and reported high engagement and traffic to its website in early tests as of April, according to TechCrunch.
TikTok is under pressure to sell to an American company before Sept. 20 when an executive order banning U.S. entities from transactions with the app would go into effect. The Trump administration has raised national security concerns with TikTok due to its Chinese parent company, ByteDance. Members of both parties in Congress have shared fears over the potential for ByteDance to be compelled by the Chinese Communist Party to share American user data.
TikTok has repeatedly disputed that it would share data with Chinese officials, saying TikTok is not offered in China and data for the app is not stored in the country.
Microsoft was the first to emerge as a potential buyer for TikTok as pressure mounted. Though it has had a mixed record on consumer offerings, Microsoft would be able to offer TikTok a strong cloud infrastructure at a well-resourced company. Oracle, another cloud provider, has also emerged as a potential buyer. Walmart teamed up with Microsoft after its attempt to become majority owner of TikTok through a partnership with SoftBank and Google-parent Alphabet fell apart, CNBC previously reported.
Pappas said she's not directly involved in deal talks but saw strengths in both Microsoft and Oracle as technology providers.
"I think if you look at the various players and the partners that we're hearing from, I think they're amazing tech companies," she said. "Oracle has its strengths in terms of being a leading data infrastructure company and focused on security, Microsoft as well, great security and privacy platform as well as everything they're doing with cloud."
Pappas took the helm at TikTok after former CEO Kevin Mayer announced his resignation this week. Mayer, a former Disney executive who was thought to be in contention for that CEO job before it was filled by Bob Chapek, said he had been looking forward to running a global company. That the actions of the U.S. government seemed to have changed the role he signed up for.
A deal to buy TikTok's U.S., Canadian, Australian and New Zealand operations could be announced as soon as next week, sources told CNBC. The deal is likely to be valued at $20 billion to $30 billion, according to the sources.
Correction: Pappas is the interim head of TikTok. A previous version of this story referred to her as interim CEO.
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