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in order to compete with its competitors ebay and amazon in the e-commerce field, walmart is significantly expanding its product categories, attracting more sellers and introducing more third-party businesses. but in the e-commerce field, they are not just facing each other. in recent years, cross-border e-commerce platforms such as temu and shein have grown rapidly in foreign markets, and have had an all-round impact on local e-commerce from products to services.

new services

walmart said on tuesday it will provide services to e-commerce platform sellers, handling the shipping of their goods directly from asia to walmart's u.s. warehouses, fulfilling orders and managing returns from any e-commerce website in an effort to boost its e-commerce platform business ahead of the holiday shopping season.

in addition, walmart will provide advance payments to qualified third-party sellers and waive peak season storage fees for sellers who send inventory to walmart fulfillment centers before september 30.

the moves, announced at walmart’s annual marketplace seller summit, are designed to help sellers meet holiday shopping demand and prepare for walmart’s promotional events, which historically coincide with amazon’s prime day in october.

walmart has aggressively courted sellers on its online marketplace, walmart.com, over the past year, and the company said sales on walmart.com have grown more than 30% in each quarter over the past year, contributing significantly to its global e-commerce sales of more than $100 billion last year.

walmart’s online marketplace has more than 420 million items and more than 100,000 active sellers, more than a third of which are based in china, according to research firm marketplace pulse. however, it still lags behind amazon, which has more than 2 million active sellers.

walmart also announced that sellers can ship orders to customers through its delivery service at an average price of 15% cheaper than competitors. it also offers a service that handles the shipping of third-party sellers' goods from asian ports of origin directly to its u.s. warehouses.

tom ward, walmart's chief e-commerce officer, said the new categories, which include high-end beauty products, collectibles and other second-hand items, are provided by third-party suppliers. this will help attract more customers and drive business growth.

“when customers search for products they’re interested in, walmart doesn’t offer just a few options, but tens of thousands of results,” ward explained. “this rich selection of products makes customers feel that there are more possibilities and choices when shopping at walmart, which increases their interest in shopping on the walmart platform.”

expected to be profitable

compared to amazon, walmart still missed the dividends of the internet era. walmart began to test the waters of e-commerce in 1996, but it was not until around 2010 that walmart made strategic investments and mergers and acquisitions in e-commerce. it was not until 2021 that it opened up restrictions to third-party sellers outside the united states. however, in today's stage of rapid growth in online consumption, walmart's e-commerce is also rising. according to financial reports, walmart's e-commerce revenue reached us$73.2 billion in 2021, making it the second largest e-commerce company in the united states. at the same time, walmart has surpassed amazon in the field of groceries, where it excels, and has become the largest online platform.

based on its complete offline retail layout, walmart was once considered the company most likely to compete with amazon in the e-commerce field. at present, walmart's online market has become an important driving force for the growth of the company's e-commerce business. walmart said in august that its online sales in the united states increased by 22% in the previous quarter. the number of active customers per week is also increasing, and more and more consumers are willing to pay extra for faster delivery services. the company is working hard to reduce costs related to e-commerce and assure investors that the e-commerce business is expected to be profitable.

walmart said sales on its online marketplace have grown by more than 30% for four consecutive quarters. while the company does not disclose the exact number of sellers on the platform, the number of sellers has grown by double-digit percentages. some categories, such as pet supplies and beauty products, have achieved annual growth rates of 20% to 30%.

it is worth mentioning that the timing of walmart's investment promotion is also worth studying. just last week, walmart just reduced its stake in jd.com. due to the promotion of relatively high-profit formats such as membership stores, walmart's business performance in the chinese market is good. although the overall hypermarket market has declined, the increase in membership stores has ensured walmart's performance in china. at present, walmart is also actively deploying membership stores in the chinese market, and even converted some hypermarkets into membership stores to earn more profits.

by the end of 2023, walmart will have opened a total of 47 sam's clubs in china. in the coming year, walmart also plans to open about 230 stores in markets outside the united states, among which sam's clubs in the chinese market will be the focus of store openings. "walmart's e-commerce business in the chinese market has many advantages over other competitors." well-known strategic positioning expert zhan junhao said that walmart has strong financial strength and rich retail experience. at the same time, walmart has a strong advantage in supply chain management, which can ensure the quality of goods and the stability of supply. in addition, walmart continues to optimize the selection strategy and overall fulfillment efficiency of online products to enhance consumers' shopping experience.

more intense

zhan junhao believes that the current market competition is fierce, and both walmart and amazon must expand more incremental markets while maintaining their competitive advantages.

in recent years, platforms such as temu and shein have experienced rapid growth in foreign markets, which has also made giants such as amazon aware of the crisis. in may this year, the third-party e-commerce data platform ecdb released the 2023 us fashion e-commerce rankings. among them, amazon and walmart ranked first and second, and shein ranked third, ahead of traditional retail giants macy's and nike.

the latest report released by probolsky research in august showed that temu beat amazon in the price war for us consumers, with 76% of respondents believing that temu is cheaper than amazon. temu's pricing is very competitive and very attractive to budget-conscious shoppers. however, 81% of respondents also said that amazon's delivery speed is faster.

in response to the competition, amazon has launched a number of initiatives. in april this year, amazon announced that starting from may 15, it would provide discounts on sales commissions for low-priced clothing products in europe, japan and canada. the commission reduction varies in different regions. in canada, amazon's original sales commission for clothing products priced below 20 canadian dollars was 17%, which was reduced to 10% after adjustment. at the end of june, amazon communicated with sellers about the new project "low price store".

regarding amazon’s multiple initiatives, seller chen qi said, “lowering commissions is a real benefit, while other initiatives have not yet shown results.”

amazon's second quarter 2024 financial report showed that amazon's net sales in the second quarter of 2024 increased by 10% to us$148 billion, slightly lower than analysts' expectations of us$148.8 billion. as the data fell short of analysts' expectations, amazon's stock price fell by more than 6% in after-hours trading.

in the quarter, amazon's north american retail business had operating income of $5.1 billion, lower than the expected $5.4 billion. regarding the current consumer trends, amazon cfo olsavsky said that consumers are more cautious and prefer low-priced products. beijing business daily reporter zhao tianshu