Walmart is optimistic about the third-party market and expects it to account for the largest share of revenue within five years

According to Reuters, Walmart Chief Financial Officer John David Rainey said at the latest meeting that in the next five years, advertising sales on Walmart.com and sales fees from third-party sellers will constitute Walmart's largest source of revenue, exceeding the revenue generated by its 10,000 offline stores.

According to Rainey, the vast majority of Walmart's overall profits still come from offline physical stores in the U.S. By charging Walmart.com third-party sellers sales fees, delivery fees, and growing advertising fees, it will become a higher-profit, faster-growing business for Walmart.

Third-party seller advertising is one of Walmart's fastest-growing revenue businesses. Walmart renamed its retail media business WalmartConnect in 2021, and the business has grown rapidly since then.

Sales at Walmart’s retail media business grew nearly 30% to $2.7 billion in the fiscal year ended Jan. 31. Walmart said last month that its fourth-quarter advertising sales were up 41% from a year earlier.

The US retail media market is booming, with retailers from Amazon, Target and Walmart to grocers such as Tesco actively trying to attract large advertisers to their sites. Recently, Amazon disclosed that its advertising business revenue in the fourth quarter was $11.6 billion.

Meanwhile, Walmart is actively investing in its third-party marketplace, recruiting third-party sellers to join, and Rainey said the site currently offers more than 400 million products.

Rainey added that advertising margins are typically between 70% and 80%. By comparison, Walmart's margins fell nearly 1 percentage point to 24.1% in its most recent fiscal year. He believes that as more third-party sellers join, advertising revenue will also grow.

Editor✎ Ashley/

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