How Walmart is aiming to improve ecommerce profitability with marketplace push

Date : 22 March 2021

Stewart Samuel

Program Director - Canada

Walmart is opening its third-party online marketplace to international suppliers, supporting its plans to significantly extend its range of products and improve ecommerce profitability.

Verification of sellers

As reported by Bloomberg, Walmart will open the Walmart.com marketplace to companies based outside of the US. While sellers will no longer require a domestic address or business tax identification, they will continue to be verified by Walmart’s global trust and safety workforce.

Source: Walmart

Expect to see more sellers from China

Over the last five years, Walmart has focused on growing the range of products it offers to over 70m through focusing on US-based companies. This move will significantly expand the number and scope of products that it will offer. This includes companies based in China, which make up a significant proportion of sellers which trade through Amazon.com.

Marketplace expansion will support ecommerce profitability

Growing its marketplace is an important element of Walmart’s strategy to improve ecommerce profitability. In addition to improving its ecommerce margin mix through selling a greater proportion of marketplace items, the retailer continues to develop enhanced seller tools and services which can help drive additional revenue. These include its Fulfilled By Walmart (FBW) fulfilment service which launched last year and continues to be scaled up. The investments which are being made to expand fulfilment capacity will impact the pace with which this is achieved, which will influence the success of its platform.

What’s the impact on its food business?

With the marketplace model being predominantly focused on non-food items, the impact of its expansion on Walmart’s food business may not be as clear. However, the retailer has seen that customers who buy items through Walmart.com often purchase related items within its stores, creating a positive impact on traffic. A broad online assortment will also help Walmart.com to become the starting point for product searches, bringing more consumers into its ecosystem. Improved ecommerce profitability will also enable further investment in delivery and pickup services across its product categories.

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