Wal-Mart Brazil will shut down its e-commerce business in its Latin American retail market and turn to physical store operations, transforming its underperforming large market into a wholesale store, according to Reuters.
It is understood that with the gradual decline of Brazil’s economy, wholesaler stores are gradually rising in Brazil.
“The company is developing a new multi-channel strategy and releasing it later,” Wal-Mart said in a statement on May 10. “The Valor Economico newspaper published the decision.
The decision could provide space for local and international retailers, who are still in the early stages of exploring e-commerce in Brazil.
Wal-Mart’s woes in Brazil have been largely due to fierce competition with local e-commerce platforms B2W, Via Varejo and Magazine Luiza SA.
Wal-Mart set up an e-commerce division for consumer Direct sales in Brazil in 2011, but by 2017 the retailer stopped selling directly and switched to the third-party seller market, which was launched in 2015.
As part of its decision to withdraw from e-commerce, Wal-Mart fired 70 of its employees working on the e-commerce market platform, leaving the remaining 20 to process offline orders.
Wal-Mart’s decision to shut down Brazilian e-commerce could lead to rapid growth for its competitors.
Paula Cardoso, CEO of Carrefour Brazil, said on May 10 that Wal-mart’s e-commerce business has been “weakened for some time, but we are ready to bring customer traffic to Carrefour.”
Wal-Mart Brazil also said it would convert 10 large, underperforming supermarkets into wholesale stores Maxxi Atacado at the end of 2020, with the first store set to open in Diadema, Sao Paulo, on May 9. Another 10 large Wal-Mart supermarkets will be transformed into Sam’s Club stores.