In an attempt to bridge the gap with its rival Amazon and drive more online sales, Walmart is taking steps to attract and retain sellers on its third-party marketplace. The retail giant recently hosted its inaugural Walmart Marketplace Seller Summit, a two-day invitation-only event for businesses that sell various products on Walmart’s website. The event featured how-to sessions and drew over 1,500 participants. Walmart is also implementing new initiatives, including expanding its marketplace to Chile, increasing the number of brand shops, and providing fulfillment services for larger items. These efforts reflect Walmart’s strategic focus on its third-party marketplace and its commitment to growing its profits through e-commerce.
Walmart’s marketplace expansion to Chile marks the company’s first foray beyond North America, signaling its ambition to tap into international markets and compete with Amazon on a global scale. By offering sellers the opportunity to create their own brand shops, Walmart allows them to establish distinctive digital storefronts to showcase their products. This move provides greater visibility for sellers and encourages them to strengthen their online presence. Walmart is actively seeking ways to enhance the selling experience for its marketplace participants, including the option for sellers to pay Walmart to fulfill online orders of bigger or bulkier items. Additionally, sellers with physical stores can leverage Walmart’s technology to offer curbside pickup or utilize the company’s delivery network. These initiatives highlight Walmart’s commitment to offering a seamless e-commerce experience for both sellers and customers.
Walmart’s increased emphasis on its third-party marketplace aligns with its broader strategy to capture higher-margin e-commerce sales and drive profits in the coming years. This shift involves implementing automation in warehouses and stores, expanding into lucrative businesses such as advertising, and enhancing last-mile delivery and fulfillment services. With a wide range of offerings and resources, Walmart aims to position its marketplace as an “endless aisle” where sellers of all sizes can connect with customers and drive mutual growth. By sharing a portion of their marketplace profits with Walmart, sellers benefit from increased exposure and access to a larger customer base.
To accelerate the growth of its marketplace business, Walmart has recruited talent from Amazon, a major competitor in the e-commerce space. Manish Joneja, Senior Vice President of Walmart Marketplace and Walmart Fulfillment Services, and Jare’ Buckley-Cox, Vice President of Walmart Fulfillment Services, both bring significant experience from Amazon. This strategic hiring enables Walmart to leverage the expertise and insights of professionals who have operated in highly successful marketplace environments. Moreover, sellers who participate in Walmart’s marketplace can also become customers for the company’s newer businesses, benefiting from services such as packing, shipping, and advertising. Walmart’s Fulfillment Services have experienced substantial growth, with over a 50% increase in sellers utilizing their services in the most recent fiscal quarter.
While Walmart remains the largest retailer in the United States, it faces significant competition from Amazon in terms of online market share and e-commerce sales. With annual online sales of less than one-fifth of Amazon’s, Walmart is determined to narrow this gap and become a stronger contender in the online marketplace. With an estimated 7% market share compared to Amazon’s 38%, Walmart has substantial room for growth. Despite launching its third-party marketplace in 2009, Walmart’s marketplace is considerably smaller than Amazon’s, which operates in 22 countries and utilizes its Prime membership program to boost online sales. However, recent data shows promising signs for Walmart, with double-digit online growth in the past two quarters and a 14% increase in customers buying items on Walmart’s marketplace in the fiscal second quarter.
Walmart’s efforts to enhance its third-party marketplace reflect its determination to compete with Amazon in the online retail space. By expanding opportunities for sellers, providing fulfillment services, and focusing on e-commerce growth, Walmart aims to close the gap and drive higher-margin sales. Hiring experienced professionals from Amazon further strengthens its marketplace capabilities, and the company’s strategic shift is evident in its revenue growth in recent quarters. As Walmart continues to invest in its online marketplace and offer an enhanced selling experience, it aims to attract more sellers, increase market share, and become a formidable competitor to Amazon.
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