If ever something deserved an exclamation mark, it was the news that retail powerhouse Walmart hopes to snap up video-sharing social media network TikTok in a deal worth as much as $30bn.

This statement stands, even though Walmart has been no stranger to breaking out its cheque book in the past. After all, it was prepared to splash out $3.3bn on Jet.com a few years back and is currently seeking to take on Amazon with its own Prime-style subscription service.

Yet a TikTok takeover, staged jointly with tech giant Microsoft, would be in another league and highlights just how radically the retail industry is being reshaped.

“Retailers like to say that you need to be where the customers are. Once that would have meant retail parks and town centres. Now it is about being in the virtual world”

Whether Walmart and Microsoft get control of TikTok’s North American and Antipodean businesses or lose out to rival bidder Oracle, the cloud computing and data titan, the fact it is even tabling an offer shines a light on how the world’s biggest retailer sees the future and what will make the ingredients for business success.

Retailers like to say that you need to be where the customers are. Once that would have meant retail parks and town centres. That was in the days when Walmart snapped up Asda – now for sale – for what in comparison to TikTok was a paltry £7bn.

Now it is about being in the virtual world, where consumers spend their time, a trend cemented by the Covid pandemic where real contact has to be avoided – whether in offices, going shopping or hanging out with friends.

Boosted by such conditions, TikTok’s US active user base has approached 100 million monthly – an increase of almost 800% compared with January 2018.

The deal, if it goes ahead, will open new revenue streams for Walmart. The retailer said: “The way TikTok has integrated ecommerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets. 

“We believe a potential relationship with TikTok US, in partnership with Microsoft, could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers, as well as grow our third-party marketplace and advertising businesses. 

“Walmart is becoming a lot more like Amazon, which has built up a colossal advertising business on top of its retail and services operations”

“We are confident that a Walmart and Microsoft partnership would meet the expectations of US TikTok users while satisfying the concerns of US government regulators.”

There’s a wealth of interest in that statement. Walmart is becoming a lot more like Amazon, which has built up a colossal advertising business on top of its retail and services operations.

As it adapts, Walmart has followed Amazon’s course through, for instance, the creation of a marketplace in partnership with ecommerce specialist Shopify and the soon-to-be-launched Walmart+ subscription service that’s akin to Amazon’s pioneering Prime.

Interesting, too, is the repeated mention of “partnership”. In a changing environment, retailers have realised that they cannot do everything themselves – their traditional expertise lies outside the technological sophistication increasingly necessary. 

As a result, partnerships have become more important – whether that’s M&S’s tie-up with Microsoft, which has helped it during the pandemic apart from any retail benefits, or Carrefour’s deal with Google.

Such link-ups show, too, that partnerships cut two ways. Retailers bring strengths to the party that are outside the capabilities of many of the tech groups on their own. 

It will be fascinating to see, as Walmart increasingly builds digital operations, how it will leverage its stores in the new landscape.

The other interesting point in Walmart’s statement is the reference to regulation. No doubt it’s connected to the new Cold War between the US and China that prompted the Trump administration to crack down on TikTok and in turn sparked the need for a sale. 

But also increasingly in regulatory focus is the power of the FANG – Facebook, Amazon, Netflix and Google – and it is drawing the attention of lawmakers from the US to Europe. 

“The potential of a Walmart tie-up with TikTok shows that long-established retailers can adapt their businesses in ways once unthought of to fit better in a world of rapid change”

Worries over their strength, and resulting competition concerns, are thought to have undermined any chance they might have had of pouncing on TikTok – a point made by New York Times reporter Mike Isaac on Radio 5 Live’s Wake Up to Money programme.

A TikTok deal, whether with Walmart and Microsoft or Oracle, is thought likely to be sealed any day now. 

The potential of a Walmart tie-up with TikTok, even if it ends up not going ahead, shows that long-established retailers can adapt their businesses in ways once unthought of to fit better in a world of rapid change. 

The reverse of the coin, though, is that for retailers with less deep pockets, the cost of change could put such radical shifts out of reach. 

In other words, if you don’t have deep pockets – $20bn to $30bn deep – you can’t afford to play.