Wal-Mart’s U.S. e-commerce business is growing fast: sales up 43%

Wal-mart reported strong holiday quarter growth Tuesday morning, with U.S. sales up 4.2% from a year earlier, including a 43% increase in e-commerce sales, according to TechCrunch.

Wal-Mart’s revenue for the quarter was $138.8 billion, slightly higher than the $138.76 billion expected by analysts; earnings per share were $1.41 trillion, up from the $1.33 trillion expected by analysts.

Many analysts said it was Wal-mart ‘s strongest financial report in years, despite last week’s sharp drop in retail sales.

“Wal-mart’s online sales growth is benefiting from the expansion of online shopping distribution,” said bank of America’s Robert Ohmes. ” this is wal-mart’s best q4 earnings performance in 15 years” he wrote in an investor note.

Wal-mart’s fourth-quarter results, which included Thanksgiving, Christmas and the accompanying shopping spike, Its outperformance, at least one of the best in nearly a decade, has changed the way the retail industry has disappointed the market in the past.

At the same time, sales at Wal-Mart’s Sam’s member stores Rose 3.3% from a year earlier, and its e-commerce business grew by 21%.

Wal-Mart attributed strong e-commerce growth to the full range of goods on Wal-Mart’s website and the expansion of self-service pickup services and delivery businesses.

The company has been competing with stores such as Amazon, Instacart and Target’s shipt from start to finish. Over the years, they have been making various attempts as Amazon grabs more and more markets.

Analysts say wal-mart has tried at least a few things:

First: wal-mart has acquired a large number of integrated and vertical e-commerce platforms in the United States, directly competing with amazon for e-commerce market space.

Starting with Wal-Mart’s acquisition of the U.S. integrated e-commerce platform Jet.com and the appointment of its founder, Marc Lore, as head of Wal-Mart’s American e-commerce company,Wal-Mart opened the way to acquisitions.
After that, walmart acquired ShoeBuy, outdoor products brand Moosejaw, men’s clothing e-commerce company Bonobos, furniture e-commerce company Hayneedle, fashion women’s clothing brand ModCloth, etc., which significantly increased the richness of its e-commerce products.

Jet.com, on the other hand, has become walmart’s most direct tool for going head-to-head with amazon.

Second: Wal-Mart works with Amazon’s competitors in the United States

Walmart, for example, has partnered with google-backed distribution company Deliv to deliver its online goods offline (though that partnership has since ended), and has agreements with a number of distribution companies to realize its “e-commerce dream.”

Last July, Wal-Mart also announced that it was ready to move all of its cloud operations to Microsoft Azure Cloud Services and Office 365, and renewed a five-year partnership with Microsoft to launch an artificial intelligence project.

Wal-Mart hopes that through the cooperation of Microsoft, it can help build unmanned convenience stores and compete with Amazon Go unmanned convenience stores.

Third:Wal-mart has also worked closely with local companies to try to compete with amazon in overseas markets.

In the middle of last year, Wal-Mart acquired Cornershop, an e-commerce platform that mainly covers Mexico and Chile.
Walmart has also taken a stake in jd.com and yihaodian.com in China, while launching its Sam’s club online store in the country. In India, wal-mart will complete its acquisition of Flipkart, a local e-commerce platform, this year.

Walmart overtook apple as the third-largest online retailer in the us in 2018, behind amazon and eBay, according to eMarketer. In addition, market research groups predict that Wal-Mart’s share of the U.S. e-commerce market will rise to 4.6% from 4% in 2018 at the end of 2019.
It can be said that Wal-Mart’s e-commerce business has finally picked up after a few years of hard operation, and the subsequent continued investment in e-commerce needs its offline retail growth rate, profit margins and cash flow to support.

Fourth: the self-service pickup service is opened, and the price of home delivery is more affordable.

Through self-service pickup service, wal-mart can provide users with an alternative to high-cost goods distribution service, while taking into account the convenience, users can avoid the shopping channel and stay in the car, the goods will be put into the trunk of the car. In 2017, walmart introduced an alternative to amazon’s more expensive membership, which gives customers free two-day shipping on orders of $35 or more.

Doug McMillon, Wal-Mart’s chief executive, said in a statement: “accelerated growth initiatives and a favorable economic environment have helped us deliver strong corporate sales and gain market share. We’re excited to connect with our customers in a more digital way. our commitment to our customers is clear – we will give them a unique new walmart convenience experience when, where and how they want shopping.”

This article is based on CNBC and Tencent, Sina