About a week ago, we found out that Amazon (AMZN) was facing increasing competition from TikTok thanks to its TikTok Shop platform. But new reports suggest that Walmart (WMT) is also coming under the gun from TikTok, and that is not the only new source of potential trouble ahead. Still, investors rallied around their discount retailer of choice and sent shares up fractionally in Tuesday afternoon’s trading.
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That Amazon was taking fire from TikTok was little surprise, but new reports note that Walmart is also being targeted. Though TikTok will most likely be banned in the U.S. next month, TikTok’s rapid growth makes it a threat to every online retailer in the markets it does operate in. Since Walmart has been rapidly pushing up its e-commerce side and operates outside of the U.S., that brings it right into the same sphere of competition as Amazon and, yes, TikTok.
With new reports noting that TikTok Shop saw its Black Friday sales clear the $100 million mark—up three-fold from this time last year, reports noted—that is a hefty chunk of business gone that could have been seen on Walmart or Amazon instead. It also serves as a sign that Walmart’s online aspirations may come under threat from the rise of TikTok.
Shooting Yourself in the Foot, Aisle Five
Other issues are coming up as well. Dollar General (DG) has been branching out into grocery delivery, a move that could hit Walmart in one of the most critical areas, a field that is largely recession-resistant. Though this will likely mean little to Walmart, it is still at least some loss in a field where it formerly dominated.
Walmart is not helping its own case, meanwhile, with puzzling return policies. A report from the Daily Dot recounted how a mom going by the name of Cardy picked up a pair of Nintendo Switches as Christmas presents. Smart move overall, but when Cardy found the Switches for less elsewhere, she tried to return them to Walmart, only to find that Walmart would only match prices when the price on the website is cheaper than an in-store price.
An attempt to return the Switches and buy them elsewhere also fell through, the report noted. A manager ultimately authorized the refund, but it was a big problem just getting there.
Is Walmart Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on WMT stock based on 26 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After an 89% rally in its share price over the past year, the average WMT price target of $96.65 per share implies 2.33% upside potential.
