Retail

Walmart’s International Omnichannel Expansion

Far from its headquarters in Bentonville, Arkansas, Walmart is seeking to deliver stronger omnichannel offerings internationally. The retailer recently announced that it was acquiring online marketplace Cornershop Inc., which offers crowdsourced on-demand delivery in Chile and Mexico. Through the service, consumers can order goods from pharmacies, supermarkets and specialty food retailers.

The idea behind the acquisition was to tap into the marketplace’s knowledge and aptitude: In a statement, Walmart International’s president and CEO, Judith McKenna, said, “Cornershop’s digital expertise, technology and capabilities will strengthen our successful businesses in Mexico and Chile and provide learning for other markets in which we operate.” In addition, McKenna said that the deal will generate synergies between the two companies as it could “accelerate growth for both companies.”

Walmart plans to pay $225 million for the fast-growing platform that has seen its number of unique users double in the past 12 months. The transaction, however, is not a done deal as it is subject to regulatory approval. As part of the agreement, Cornershop will remain an open platform and its three founders — Oskar Hjertonsson, Daniel Undurraga and Juan Pablo Cuevas — will continue to lead the business, along with their teams.

Amazon is also bolstering its eCommerce efforts in Mexico. It plans to start offering drinks and food in the country such as sweets, snacks and beverages. In terms of selection, Amazon Mexico’s senior product manager, Fernando Ramirez, said earlier this year that the retailer is “committed to offering our clients as many products as we can.”

Despite interest from Amazon, eCommerce still makes up only a small portion of all retail sales in Mexico. However, the segment has grown quickly, and Amazon, along with its competitors, is seeking to ramp up its focus on technology, product offerings and logistics. Amazon’s move, in particular, could help the retailer vie with Walmart de Mexico. Amazon also faces competition from Walmart as the latter bolsters its eCommerce and omnichannel efforts in other markets.

Global eCommerce Transformations

Cornershop is hardly Walmart’s most sizable international investment in recent times. In India, Walmart’s $16 billion investment in online marketplace Flipkart is moving along with the approval of the country’s anti-trust regulator. To that end, the Competition Commission of India (CCI) announced that it had approved the proposed acquisition in an August tweet. That news followed a May announcement from the retailer it was acquiring about 77 percent of Flipkart for around $16 billion. At the time, it was reported that the acquisition would be the biggest deal for India’s eCommerce sector.

In an announcement of the acquisition, Walmart CEO Doug McMillon said, “India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading the transformation of eCommerce in the market.” To that end, Euromonitor reports that online sales in India are currently growing about 35 percent a year, fueled by a rising middle class, demonetization and an increasing push toward urbanization.

Amazon has also boosted its efforts in the country. The eCommerce retailer is rolling out support for Hindi on its India apps and website to reach local customers in their own language. Support for the language is particularly important for Amazon as the retailer seeks to make India a major market. Amazon India’s director of customer experience andmMarketing, told the New York Times that the company’s “next 100 million customers will have to be in the vernacular language.”

Beyond India and South America, Walmart has also turned its efforts towards China. There, the retailer invested $320 million in the round of funding for grocery and delivery company Dada-JD Daojia. That firm is partly owned by Chinese eCommerce retailer JD.com and operates two businesses: Dada, the delivery service that has a network of five million delivery people, and JD Daojia, which partners with retails stores to provide delivery services. Walmart is no stranger to Dada-JD: The retailer has had a partnership with Daojia since 2016 when it invested $50 million.

In a statement at the time, Walmart China’s president and CEO Wern-Yuen Tan said, “We are confident that this deeper collaboration with Dada-JD Daojia will enhance our omnichannel footprint and deliver a better [online to offline (O2O)] customer experience.” Additionally, Reuters noted that Walmart is aiming to integrate its retail network in the country with the smart retail movement happening. That shift, in which retailers and tech companies meld online and offline shopping, appears to be of interest to Walmart as it plans to acquire Cornershop amid its omnichannel investments around the globe.

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