It is learned that on March 23, Kantar and NRF jointly released the "2022 Global Top 50 Retailers Ranking", with Walmart and Amazon occupying the first and second positions respectively, maintaining the same ranking as last year. NRF specifically pointed out that Walmart and Amazon have stepped up their efforts to compete for the position of the world's largest retailer. For example, Walmart is building an omni-channel market and in-store services to expand the low-income group market in the United States and Mexico; while Amazon is also promoting business in new markets such as Latin America and Asia and continuing to expand its physical store network. In fact, the competition between these two retail giants has already begun, and with the continuous increase in the international strength of both sides, the competition has now entered a white-hot stage, especially in the field of online e-commerce. It is learned that in recent years, Walmart has been continuously increasing its investment in online e-commerce, not only increasing its investment and layout in e-commerce business, but also extending the platform's olive branches to more sellers and relaxing entry conditions. On the one hand, as Walmart's e-commerce business grows stronger and its share of the US e-commerce market increases year by year, it has already had an impact on Amazon's dominance in e-commerce; on the other hand, after Amazon's account ban in 2021, a large number of Chinese cross-border sellers began to shift their businesses, and Walmart became the second choice for many sellers. Obviously, Walmart has set its sights on the big pie of cross-border e-commerce and is chasing Amazon's dominance through third-party platforms, Walmart+ and other initiatives, competing with it in many ways and trying to get a share of the huge market. Who’s competing: Intensifying competition with Amazon It is reported that in 2021, US$510 billion of consumer spending in the United States went to Amazon, accounting for 9.4% of total spending. US$472 billion went to Walmart, accounting for 3.6%. This means that for every US$100 spent by American consumers, US$18 went to Amazon and Walmart. Amazon and Walmart originally represent two "extremes", with the former dominating the e-commerce field and the latter dominating the retail industry. However, in recent years, as the businesses of both companies have diversified, this situation has gradually changed. Whether in the e-commerce or retail market, the two are more closely intertwined and subtle. 1. Competing with Amazon in a niche market It is learned that in 2021, Amazon surpassed Walmart for the first time and dominated the US retail industry, finally reaching the top after 27 years. However, Amazon and Walmart have not stopped competing, and the two e-commerce giants have been "competing" in various market segments. Data shows that in 2021, Amazon's revenue in the areas of electronics, appliances, sporting goods, hobbies, music and books was nearly five times that of Walmart. To break it down, 25% of U.S. household spending on sporting goods, hobbies, music and books goes to Amazon; in the electronics and appliances sector, U.S. households spend five times more on Amazon than on Walmart. In addition, in the field of clothing and accessories, Amazon is also the main shopping place for American consumers. In 2021, Amazon's revenue in this field was twice that of Walmart, with a market share of 15%, while Walmart accounted for 6.5%. However, Amazon failed to surpass Walmart in three areas: food and beverages, medical and healthcare, and personal care. 2. Walmart seizes Chinese sellers It is learned that in recent years, Walmart has paid more attention to the Chinese market, especially after Amazon’s account blocking wave, and has launched a number of support policies to attract sellers to settle in, in order to compete with Amazon for more market share. According to foreign media reports, Walmart recently announced the launch of the "New-Seller Savings" campaign, a plan to support new sellers to encourage more sellers to join Walmart's third-party marketplace. Sellers who join the third-party marketplace by May 31, 2022, and begin selling on Walmart.com by June 30, 2022, will reportedly receive a 50% discount on sales commissions for 90 days. Sellers who are approved to join Walmart Fulfillment Service (WFS) can get 90 days of free storage and a 10% delivery discount by completing the operational setup and shipping the product (at least one piece) to a Walmart distribution center before June 30, 2022. At the same time, new sellers entering the Walmart Marketplace can also use the Walmart Connect advertising platform to reach more consumers and increase revenue possibilities. In March 2021, Walmart held a press conference in Shenzhen, officially opening up investment to Chinese sellers; in April this year, Walmart once again held the Global E-commerce Seller Summit and announced the latest investment requirements and policies. Compared with its previous "aloof" attitude, Walmart now attaches great importance to Chinese sellers and has relaxed the entry requirements for Chinese sellers, which seems to be a tit-for-tat with Amazon. 3. Vigorously develop own brands As we all know, Amazon's own brands have a natural advantage on its website. Not only can they obtain first-hand buyer consumption data, but they can also get traffic support, which puts third-party sellers under great pressure. It's not just Amazon that values its own brands. Walmart is also gradually increasing its efforts to develop its own brands. It is learned that Walmart currently operates a series of private-label shoe brands, including Time and Tru, Wonder Nation, No Boundaries and Ozark Trail, and is expanding the coverage of its private-label and exclusive brands. In late March, Walmart announced that the Sam & Libby brand owned by Caleres and the Madden NYC brand owned by Steve Madden would be sold exclusively at Walmart, a partnership that marked a historic step forward for Walmart. On April 30, Walmart announced the launch of its own clothing brand Love&Sports, which is now available on Walmart's website and 1,500 stores, offering more than 120 items priced between US$12 and US$42. In addition, according to the latest news from Walmart, PayPal CFO John Rainey will join Walmart as CFO on June 6. Foreign media analyzed that recruiting Rainey from PayPal seems to be Walmart's latest move to enter the e-commerce field. Walmart's various moves show its ambition to compete with Amazon, the e-commerce giant. It has not only taken multiple measures to ensure the implementation of its e-commerce strategy, but also moved closer to Amazon in the sub-sectors. So what achievements has Walmart made so far? New business opportunities: Walmart's rise in e-commerce It is learned that in February 2022, Walmart released its 2022 annual report. Data showed that Walmart's total revenue was US$572.754 billion , a year-on-year increase of 2.4%; operating profit was US$25.942 billion, a year-on-year increase of 15.1%. At the same time, Walmart also announced its revenue data for the Chinese market: Walmart China's Q4 net sales increased by 26.7% year-on-year and 19.8% year-on-year; Walmart China's Q4 e-commerce net sales increased by 93%, and the cumulative growth rate over two years was 158%. It is worth noting that Walmart's e-commerce net sales reached US$73.2 billion, an increase of 11% year-on-year and a significant increase of 90% compared to two years ago. It is reported that in the context of the continued spread of the global epidemic and the supply chain crisis, Walmart's performance achieved counter-cyclical growth, mainly due to its strong supply chain and price advantages. At the same time, the epidemic has also stimulated the rapid development of Walmart's e-commerce business. Data shows that Amazon ranks first in the US e-commerce market share, while Walmart ranks second in the US market share, but there is still a big gap with its rival Amazon. Walmart's chief financial officer, Biggs, said Walmart expects to have more than 200 million items online by the end of this year (2022). While its e-commerce business is developing in full swing, Walmart has also been enhancing the platform functions and its international influence to pave the way for its e-commerce globalization. In June 2020, Walmart reached a cooperation with independent site Shopify, allowing Shopify merchants to sell products on the Walmart market; in 2021, Walmart also reached a similar cooperation with BigCommerce, further expanding the number of sellers; in January 2022, Walmart began to invite Indian sellers to join its third-party market, and began to expand its international expansion journey; in May 2021, Walmart integrated with logistics and transportation platform ShipBob to strengthen the delivery network for online orders.
In addition, as a top priority for e-commerce platforms, Walmart is also focusing on building its own logistics system to attract more international sellers, such as launching Walmart Fulfillment Services (WFS, Walmart's logistics service). Walmart executives said: "Growing e-commerce and WFS has been a priority over the past few years as we have invested in expanding fulfillment capabilities, launching new services for sellers, and doubling the number of items available to customers." The launch of WFS, its opening to international sellers, and the increasing number of advertisements in search results have brought Walmart closer to Amazon in the e-commerce field. Although Walmart still has certain requirements for international sellers to enter, the share of Chinese sellers on its platform will continue to rise, and this is the trend. The Second Curve: Chinese Sellers Enter Walmart Data shows that since March 2021, Chinese sellers have entered the Walmart market one after another. As of mid-January 2022, Walmart has added approximately 8,000 sellers from China, accounting for 14% of its total new merchants in the same period. This rapid growth trend continued until April this year, when 51% of the 1,000 new sellers Walmart recently added were from China and only 46% were from the U.S. According to MarketplacePulse, one year after Walmart opened its doors to Chinese sellers, the number of new Chinese sellers has surpassed that of American sellers. Walmart Marketplace has reportedly added nearly 150,000 sellers since its launch. Although the number of sellers in the United States is still ten times that of China, American sellers have been around much longer than Chinese sellers. At the same time, apart from China, there are very few sellers from Europe or other countries selling on Walmart. Why have so many Chinese sellers chosen Walmart in the past year? First, it is related to the Amazon account suspension. After the suspension incident last year, domestic cross-border sellers began to deploy multiple channels to spread risks and target many emerging platforms. In the United States, Walmart is second only to Amazon in popularity and is growing rapidly. Secondly, Walmart itself is also very strong. As a retail giant with more than 4,000 offline stores and 90% of the population living about 15 miles away from it, Walmart can achieve faster delivery speeds than Amazon. And all of this can be converted into traffic, bringing huge growth to the platform. More importantly, Walmart provides sellers with an opportunity to reshuffle. Data shows that the top 50 Chinese cross-border e-commerce sellers have already settled in Walmart, and some sellers can achieve thousands of orders per day. However, large sellers on other platforms such as Amazon have not yet occupied such a position on Walmart. Therefore, sellers have less competition on Walmart and a greater chance of becoming top sellers. Nowadays, more and more Chinese sellers are paying attention to this emerging platform. Will Walmart be the next e-commerce hotspot? Is switching from Amazon to Walmart a good choice? Change and constancy: Sellers still have opportunities to do business with Walmart According to Walmart's investment policy, the requirements for Chinese sellers to enter Walmart's US site are as follows: - Chinese companies operating in accordance with laws and regulations;
- Rich experience in operating cross-border e-commerce platforms;
- Fast and reliable order fulfillment capabilities;
- The annual sales of a single account on the cross-border e-commerce platform in the past year is greater than or equal to US$30,000 (for reference only).
Compared with the numerous rules and regulations and various audits required to enter Amazon, Walmart’s entry requirements are relatively relaxed, and it has launched a series of support policies that are more friendly to novice sellers. In fact, nowadays, multi-platform layout has become a consensus among cross-border sellers, and many sellers are practicing this principle, including cross-border big sellers who have started the layout of Walmart early and have achieved certain results: After the Amazon account suspension incident, Xinghui Co., Ltd. accelerated the promotion of the "multi-platform, multi-channel" business strategy, expanding online sales on third-party platforms such as Walmart, Ebay, Rakuten, and Newegg, as well as sales on its own website. In 2021, the company achieved operating income of RMB 605 million through non-Amazon channels such as its own platform, Walmart platform, and offline channels, a year-on-year increase of 92.06%. Huading Group's cross-border e-commerce segment is mainly sold through third-party e-commerce platforms such as Amazon, Walmart, AliExpress, Shopee, Lazada, and eBay. The independent website operated by Tongtuo Technology receives and pays through the PayPal platform. So for small and medium-sized sellers, is it necessary to develop the Walmart platform? The Walmart State of Sellers Report identifies a wealth of opportunities for sellers of all sizes on this emerging platform that is poised to become a leader in e-commerce. At the same time, the report also disclosed key data of the Walmart platform: • 95% of Walmart sellers have profitable businesses; • 73% of Walmart sellers have profit margins of more than 20%, and more than half of sellers have annual revenues of more than $100,000; • 54% of small and medium-sized brands have annual revenues exceeding six figures, and 33% have profit margins exceeding 20%; • 57% of enterprise sellers have annual revenue between $2 million and $10 million. It is learned that the biggest advantage of third-party sellers on Walmart's e-commerce platform comes from its huge customer base. According to reports, in the global market in 2021, the potential business opportunities of Amazon's third-party sellers are 1:48 (that is, one merchant may have the opportunity to face 48 consumers and make transactions), while Walmart's business opportunity ratio is 1:1918, that is, one Walmart seller has 1918 customers. For Chinese sellers, the Walmart e-commerce platform not only has the advantages of high traffic, high exposure, and low commissions, but also has relatively little competition at present, and has greater opportunities for development. However, it is worth noting that, like other e-commerce platforms, Walmart also has certain operating risks. For example, the incident that a large number of Walmart sellers were blocked this year has given a warning to the platform sellers that no matter which platform they engage in cross-border trade, they need to abide by the platform and market rules. It is reported that 40,000 new sellers are expected to enter Walmart this year. Today, the battle between Amazon and Walmart is still going on. We can still look forward to whether Chinese sellers can achieve a brilliant turnaround with the help of Walmart.
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