Walmart’s relationship with e-retail and e-retail logistics seems to be developing fast.
The giant American retailer already has a very large e-commerce business within the US, being Amazon’s most significant rival. Now it seems to have decided to follow Amazon in terms of becoming both a third-party e-retailing ‘market-place’ and a third-party fulfilment and last-mile provider.
In an announcement on Tuesday, the company announced what it called its “Multichannel Solutions program” which enables sellers on its internet platform to utilise the logistics services of WFS, or ‘Walmart Fulfilment Services’, to “fulfil orders from any eCommerce site via Walmart’s supply chain”. The service that Walmart offers includes “plain, unbranded packaging, fast, reliable shipping and competitive rates averaging 15% lower than the competition”.
The whole offering is quite complex. It includes ‘Walmart LocalFinds’ which offers a pick-up service for sellers who also own physical stores and yet also look to integrate this with a last-mile capability. In addition, Walmart is offering what it calls its ‘Cross Border import service’ which enables sellers on its platform to import “full-container-load shipments, … from ports of origin in Asia directly to WFS facilities across the U.S.”. This presumably leverages Walmart’s buying power in container logistics across the Pacific. It is unclear if this service also applies to products sourced outside Asia.
Clearly Walmart is making an aggressive entrance into not just to the market for small merchants that previously were dependent on Amazon, but into the wider logistics market. Although the logistics services are not offered in the open market but restricted to Walmart’s merchant customers. However, the scale of the capability of Walmart adds to the competition in the logistics market. Walmart clearly also sees that accessing higher volumes in sectors such as container shipping must increase their purchasing leverage.
These developments ask questions about Walmart’s longer-term ambition in internet retailing. The company has just sold its sizeable stake in the Chinese e-retailer, J.D.Com apparently influenced by the apparently poor prospects of Chinese retail sales. Yet the latest development implies that Walmart is looking to take on the global third-party retail platforms that include not just Amazon but also Shein and Temu, possibly in markets outside the US. This would have significant implications for last mile and other retail logistics platforms worldwide.
Source: Ti Insight
Author: Thomas Cullen
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