Walmart.com was launched in 2000, and there is nothing to watch out for in the early stages of development. It was not until August 2016 that it spent $3 billion to acquire Jet.com, an e-commerce company that was not well-known but had strong financing capabilities.
The market generally believes that in order to bring Jet founder and CEO Marc Lore to his knees. Wal-Mart is too expensive to pay for the acquisition, and it is constantly questioning. Some analysts even believe that the acquisition will become a “serious mistake” for Wal-Mart. To this day, Walmart.com has responded with doubts and analysts with performance.
Last week, Wal-Mart issued a statement saying that its e-commerce sales are expected to achieve 40% growth in the fiscal year ending January 2019 and achieve stable profit growth. Driven by the news, Wal-Mart shares rose 4.47% on the day and the market value increased by 10.75 billion US dollars. Since then, Wal-Mart’s share price has risen for five days and achieved gratifying results.
In fact, after Wal-Mart completed the acquisition of Jet.com in 2016, it gave the outside world a consensus. It took Wal-Mart 16 years to take online sales seriously. The company finally began to pay attention to online power and began to compete with e-commerce giant Amazon.
Subsequently, Jet.com founder Marc Lore became the CEO of Wal-Mart’s US e-commerce operations, and since then he has been promoting Wal-Mart’s digital revolution and driving the rapid development of Walmart.com.
After the coaching change, Wal-Mart seems to have changed its previous business strategy and started a round of acquisition frenzy on a global scale. From brands such as Moosejaw and Bonobos to Flipkart, India’s largest online retailer. In August this year, the Indian government officially approved Wal-Mart’s plan to acquire Flipkart, India’s largest e-commerce website, for $16 billion. The largest M&A case in the history of e-commerce in India, Wal-Mart jumped from a role of “late” in the Indian e-commerce market to the leading position in the industry, completing Wal-Mart’s coverage of the huge potential e-commerce market in India. The layout is expanding rapidly.
It is worth mentioning that Wal-Mart not only worked hard on the acquisition, but also redesigned the Walmart.com website. In April, Wal-Mart said it will launch a new version of the website. Compared to the old version, the new version of the website has undergone a lot of reforms from the foreground to the background. From the buyer’s point of view, the appearance of the website is more fashionable and tidy, the quality of the website is greatly improved, and the details such as icons, buttons and fonts are also adjusted to conform to the visual style of the new website. From the background, the new website provides consumers with personalized services such as localized product recommendations, and simultaneously displays the latest best-selling products, inventory and order status, and consumers’ potential likes. The new website has made Wal-Mart’s image a big change and has become a shopping platform that consumers are more willing to visit.
The company expects that the company’s e-commerce sales in the US will reach $16 billion by the end of 2018. 40% more than last year. Most importantly, Walmart’s other markets also have sales.
The Marketplace looked at the development of Walmart.com from four key metrics: product quantity, popular category, market size and free two-day delivery.
First, the number of Wal-Mart products
Currently, Wal-Mart Online has more than 43 million items. A year ago, this figure was less than 30 million, and in 2016, this figure just exceeded 12 million. The catalog includes products that Wal-Mart sells on its own (also known as first-party merchandise) and third-party sellers.
Wal-Mart only sold 3.5 million products, and the market accounted for 92% of the complete catalog. Wal-Mart listed the first-party merchandise as low as 8% of all merchandise sold on walmart.com. For most of 2017, this number was hovering above 10% and reaching 25% in 2016. In three years, Wal-Mart has expanded its online catalog to include 2 million new products, and the market is driving the growth of most product catalogs.
Second, Wal-Mart’s hot items
Home, books, jewelry and electronics are the four best-selling categories and the most popular categories. These categories account for more than half of all available projects, and one of them lists 28 million products. Only 1.5% of the products that stand out in the jewellery and clothing category are sold by Wal-Mart itself, and the rest are from third-party sellers.
Amazon has more products in the book department than Wal-Mart sells, but with the development of the market, Wal-Mart will eventually catch up. Wal-Mart is more focused on the development of millions of SKUs, and the rest is market and category acquisitions.
Third, the number of sellers in the Wal-Mart market
Then, Wal-Mart has been constantly developing. However, it is a relatively small market with more than 20,000 sellers recently. Compared with other competitors in the United States, its number of sellers is not large, and its entry criteria are relatively strict. It reviews the seller before it is approved for entry into the platform.
As a result, more than 250,000 new sellers have joined Amazon this year, but fewer than 4,000 sellers have successfully entered Wal-Mart.
Wal-Mart began to invite sellers in 2009, but until 2016, online sellers exceeded 1,000. However, since 2016, in the past two years, it has increased the majority of sellers, which led to a rapid increase in online goods, so Wal-Mart’s online catalog has added tens of millions of new products.
Four, Wal-Mart’s two-day delivery
The most important aspect of Wal-Mart’s online market development may be free and fast delivery. “In today’s e-commerce world, the two-day free shipping is a bet. On January 31, 2017, Wal-Mart’s US e-commerce company president and CEO Marc Lore announced that it would charge for a two-day free delivery. The cost is no longer meaningful. The company canceled the $49 annual ShippingPass membership program, which offers an unlimited two-day free shipping service similar to Amazon Prime.
At the time, the media mentioned in the report: “In addition to life, freedom and the pursuit of happiness, you can now add another inalienable right: almost everything can be transported for two days.”
In 2017, Wal-Mart launched a two-day transportation service for 2 million products, but so far this number has not yet grown. Twenty months later, it is still in the 2 million products. Prime is Amazon’s “trump card”. If Wal-Mart’s similar business can’t compete with it, then there is no need to discuss the relationship between Amazon and Wal-Mart. After all, 2 million and 100 million are far apart.
Wal-Mart’s two-day delivery service is where the market plays a key role. Although Wal-Mart has expanded its catalogue, many products are not well integrated into the shopping experience because the satisfaction of the merchandise depends on the seller, and the service is provided by itself. Amazon’s Prime service is provided by Amazon itself, and Wal-Mart does not provide a similar service, which hurts it.
Insiders said: “We have seen very promising results through Wal-Mart’s two-day plan for 3P sellers.” Wal-Mart’s existing free 2-day delivery program provides a huge opportunity for merchants to make millions of Buyers have noticed their list of goods.
Wal-Mart has expanded its merchandise category and established a relatively mature online market. For it, the challenge now is to provide a two-day free shipping service nationwide. Amazon has adopted its Prime program as its gold standard, as well as for Wal-Mart.