Following its $3.3 billion acquisition of Jet.com this past fall, Walmart is looking to expand its offerings beyond its own website to compete with eCommerce giants like Amazon.
While both companies will remain separate entities and will continue to operate as such, a Walmart spokesperson has confirmed that its everyday brands, including Great Value, Equate and Sam’s Choice, will soon begin to appear on Jet’s website. Both companies will also continue to target different shoppers, including Walmart’s price-conscious shoppers and Jet’s upscale city dwellers.
Why is Walmart making the move now to branch out with other eCommerce companies?
The reason for the big push stems from Walmart’s slowly rising eCommerce stats over the past year. While online sales from Walmart’s direct website account for a mere 3 percent of its total revenue, the entire eCommerce arena makes up 11 percent of the entire retail industry.
One place where Walmart is doing well is on third-party sites like Marketplace, which saw a 36 percent increase in its gross merchandise value in the past 12 months. The amount of items Walmart now offers on Marketplace has quadrupled since last year, reaching an astounding 35 million.
Given Walmart’s growth success with Marketplace and the fact that it saw online revenue grow by double digits for the last three quarters, it makes sense for the retail giant to integrate its brands with Jet.com. Depending on the success of this product integration process, we may see Walmart continue the trend of acquiring third-party eCommerce sites to display its branded products.
The big question here is whether or not this move will be enough for Walmart to compete with Amazon on a much larger scale in its quest to become the eCommerce leader.