In the fourth quarter of 2020, Wal-Mart’s e-commerce sales in the United States increased by 69% year-on-year, while its total sales increased by only 7.3%. Obviously, Wal-Mart’s future sales growth will depend on e-commerce.
Encouraged by the growth of digital sales driven by the epidemic, Wal-Mart has no fear and decided to challenge Amazon's dominance in the e-commerce field. Wal-Mart is probably the only retailer that has the financial resources, logistics capabilities, and scale to dare to post to Amazon.
Wal-Mart has adopted a two-pronged approach to try to attract Amazon sellers while expanding its market to international sellers. Wal-Mart is in contact with several of Amazon's largest sellers and has already contacted Perch, one of the large aggregators that acquired Amazon's small sellers.
Walmart sales
According to a survey by Amazon seller tool Jungle Scout, 39% of Amazon sellers are considering entering Wal-Mart this year. Those sellers seeking market expansion are often mature FBA merchants, and 54% of sellers have more than 10 active product listings on Amazon. Many Amazon sellers have lost interest in the Amazon market. Some sellers were removed by Amazon without explanation, and objections to Amazon’s operations often took a long time to resolve.
The survey shows that the products of those sellers who are interested in Wal-Mart are mostly Amazon's best-selling categories, such as household and kitchen products, toys and games, sports and outdoor products. Therefore, Wal-Mart and Amazon have the same customer base.
Wal-Mart does not charge sellers a monthly fee, while the monthly fee for an Amazon professional account is $39.99. Walmart charges sellers a fixed referral fee (usually 15% of the product price) for each sale. If sellers use the Walmart Fulfillment Services launched last year, they will charge additional fees.
![Foreign media: 39% of Amazon sellers consider entering Wal-Mart this year]()
Although Wal-Mart did not announce the fee structure of WFS, it said that storage and logistics costs depend entirely on the weight and size of the product.
Amazon is open to everyone to register, and the product launch can be completed within a few days. In contrast, Walmart Marketplace requires potential sellers to apply and accept review, after which Walmart will send out invitations to eligible sellers. In addition, the seller must have a U.S. tax identification number.
Walmart's strategy
According to Marketplace Pulse statistics, Walmart now has about 80,000 sellers, which is insignificant compared to Amazon's 9.8 million, but Amazon has only 1.9 million active sellers.
Wal-Mart hopes to develop as soon as possible. In February of this year, Wal-Mart announced the establishment of a cooperative relationship with the e-commerce platform BigCommerce. This cooperation will rapidly increase the amount of products that Wal-Mart can provide, which currently has 85 million pieces in inventory. BigCommerce sellers can use an application called "Walmart Connector for BigCommerce" to easily integrate their stores with Walmart Marketplace.
In order to attract new sellers, Wal-Mart is also simplifying its cumbersome entry process. Wal-Mart is also promoting a limited-time offer called "New-Seller Savings" (New-Seller Savings). All merchants who join the platform before March 31 and go online before May 1 are exempt from 30 days of sales commissions.
Wal-Mart recently announced that it will open its market to foreign sellers. Currently, only local merchants in the United States can join the Walmart Marketplace. Foreign merchants will be reviewed by Walmart's global trust and security team. Wal-Mart's target is those Chinese retailers and manufacturers that provide low- and medium-priced products that are best-selling in the United States. Under the influence of the epidemic, e-commerce in the United States has surged, and the U.S. e-commerce market is extremely attractive to Chinese sellers.
Walmart's advantage
Wal-Mart has 4,756 retail stores in the United States for in-store pickup, curbside pickup, and customer returns. In contrast, Amazon's Whole Foods chain has only 500 stores in the United States.
Earlier this month, Wal-Mart cancelled the $35 minimum order requirement for its two-hour delivery service, and offered this service in nearly 3,000 locations, covering 70% of the population in the United States. These stores are essential for the two-hour delivery service, mainly for the delivery of agricultural products, food, daily necessities and other consumables. The cost of a two-hour delivery service is generally US$10, plus a standard delivery fee ranging from US$7.95 to US$9.95.
If consumers subscribe to Walmart+, Walmart will waive the delivery fee, with an annual fee of US$98 and a monthly fee of US$12.95. Walmart+ is a competitor of Amazon Prime. Although Walmart does not provide video and music services, it offers a fuel discount of 5 cents per gallon at Walmart and Murphy gas stations, and membership rates are available at Sam's Club gas stations.
It will take a long time for Wal-Mart to catch up with Amazon, but it has already made substantial progress. In addition to physical stores, Wal-Mart and Amazon have a similar online customer base. With the continuous expansion of online goods and services, Wal-Mart may challenge Amazon's dominance.
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