Wal-Mart’s Online Global Expansion Can Be Misleading

Written by Evan Schuman
April 8th, 2010

Wal-Mart is pushing hard to ramp up its global E-Commerce efforts, according to some employment ads it’s been posting, The Wall Journal reported. But there are reasons behind Wal-Mart’s sluggish online sales.

“Wal-Mart during the past two weeks began advertising for a key architect of the global E-Commerce effort, the program’s director of market development. Qualifications for the position, which pays more than $100,000 a year, suggest where Wal-Mart may be focusing its expansion,” the Journal story said. “Fluency in one or more of the following languages—Mandarin, Cantonese, Japanese, Portuguese, Spanish, Hindi and French—is a plus, the job posting says.”

The story pointed out that Wal-Mart’s online earnings show many smaller retailers have outflanked it. Well, let’s be fair: With Wal-Mart’s $405 billion annual revenue, every retailer is a smaller retailer. But with $1.74 billion in online revenue in 2008, having the Bentonville powerhouse beaten by online purebred Amazon ($19.2 billion) is not that humiliating. When Wal-Mart’s E-Commerce dollars are also being bested by Staples, Office Depot, OfficeMax, Sears and Best Buy, however, that’s hardly a morale booster.

But the world’s largest in-store retailer has some legitimate reasons. As the biggest, it has always had the most to protect. That thinking is what slowed down a lot of large brick-and-mortars in the early days of the Web, and Wal-Mart was understandably among the last to succumb to the inevitable.

Also, the practical, everyday discount nature of Wal-Mart’s persona doesn’t lend itself to an especially exciting online presence. In fact, has consistently deployed helpful technology and has been at the forefront of shop-online-pickup-in-store as well as showcasing in-store inventory.

Those are excellent features and shrewd uses for the Web site. But both techniques also use the Web to drive sales to the stores. From a shareholder perspective, that’s fine. A dollar’s a dollar, and a dollar spent in-store will likely yield several more dollars in-store, as long as the consumer is already there.

But it also means that when the company’s E-Commerce revenue is isolated, it delivers a misleading picture.

The global market is a different situation. Wal-Mart has had mixed results with in-store launches overseas, and it’s likely that its E-Commerce operation will face similar hurdles. But as long as Wal-Mart is still making a lot more revenue than any other retailer on the planet, it’s hard for any criticisms to stick.


One Comment | Read Wal-Mart’s Online Global Expansion Can Be Misleading

  1. Retailinsider Says:

    Walmart is not alone in being a big operator that has been off the pace with it’s online operations. Remember that it’s first foray involved outsourcing it’s Internet store to venture capital firm Accel Partners. It beggars belief looking back. But things could be changing as UK-based Asda is doing some intersting things so maybe the UK could become a centre of excellence for Walmart online.


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