Walmart Brasil has announced it will shutter its eCommerce division in Brazil and focus on physical stores, according to a report by Reuters.
The company said it plans to turn underperforming hypermarkets into brick-and-mortar wholesale stores. Wholesale has become more and more popular in Brazil as the country pulls out of a difficult recession.
“The company is working in a new omnichannel strategy which will be later announced,” Walmart Brasil said in a statement on Friday (May 10).
Walmart had plenty of eCommerce competition from local companies, like B2W, Via Varejo and Magazine Luiza SA.
Walmart’s started its eCommerce division in Brazil in 2011, but by 2017 it stopped doing direct sales and focused on just being a marketplace for third-party sellers, an option it launched in 2015.
The company has never said how much money it made from online sales in the country. In the middle of 2018, Advent International acquired 80 percent of the Brazilian operation, but the division was already declining.
“We’re being thoughtful and deliberate as we assess our portfolio and make decisions about where and how we’ll grow,” Walmart International CFO Brett Biggs said at the time. “We’re continually reviewing our portfolio, and, consistent with that, we’re currently considering options for our business in Brazil.”
About 70 of the 90 employees for the division were laid off, and the 20 who remain are dedicated to managing orders.
Other companies are ready to jump on the advantage of Walmart leaving the eCommerce arena, among them Carrefour. “Walmart’s [eCommerce] operation has been shrinking for a while now, but we are prepared to direct their consumer traffic to Carrefour,” said Paula Cardoso, chief executive officer of Carrefour eBusiness Brasil, according to the report.
Walmart Brasil said it will convert 10 underperforming hypermarkets in wholesale stores called Maxxi Atacado by the end of next year. The first one was opened on May 9 in Diadema, a city new Sao Paulo. An additional 10 hypermarkets will be refurbished into Sam’s Club stores.