eCommerce Giants Make Headway Crafting Services Across Merchant Marketplaces

For eCommerce giants — Walmart, Amazon and Shopify are among the most visible examples — the continued surge in online shopping has given momentum to efforts to craft merchant marketplaces.

Earnings reports from these companies show that more merchants are taking advantage of fulfillment services and advertising, which opens up additional revenue streams.

Walmart’s fiscal-year 2024 fourth-quarter earnings materials showed that eCommerce growth — which was up about 23% overall — was driven in part by growth in its marketplace, which had 20% more sellers than a year ago. International eCommerce sales gathered 44%, led by marketplace. Also in the U.S., Walmart Connect advertising sales gained 22%.

Walmart Connect is the name of the advertising platform that allows enterprises and brands to run ads on the digital arm of the company, Walmart.com, and in-store as well. Global ads were up 33%, the company said.

More details will be available when Walmart files its latest 10-K with the Securities and Exchange Commission. But management noted on a conference call with analysts that eCommerce sales topped the $100 billion mark, on an annualized basis, for the first time.

Walmart President and CEO Doug McMillon said during the call that “the combination of marketplace and the commissions that go with it, fulfillment services, membership, advertising and our smaller but fast-growing data monetization business enable us to grow our bottom line faster than our top line.”

More sellers are using the fulfillment capabilities, he said, and “we’re encouraged by the strong demand from new advertisers as active advertiser counts increased over 20%.

The long-standing goal is to cement marketplaces that, as the CEO said, “will help us not only with commissions related to marketplace and fulfillment service scale but will also help us with advertising and data monetization and some of the other keys to changing the shape of the P&L, or the business mix, as we refer to it.”

Walmart Chief Financial Officer John D. Rainey said on the call that global advertising grew 28% to about $3.4 billion in the latest period. Walmart U.S. marketplace revenue grew 45%, with more than 35% of orders fulfilled by Walmart fulfillment services.

Amazon Gains on Advertising, Too

Amazon said in its most recent quarterly earnings report that third-party seller services sales were up 20% to $43.6 billion. Advertising services gained 27% to $14.6 billion.

Management said on a conference call with analysts that fulfillment architecture and inventory placement are areas of focus in the current year. Amazon President and CEO Andy Jassy noted that advertising has been strong due in part to growth in sponsored ads. He spotlighted the appeal of the “self-service solution for brands to create streaming TV campaigns with no minimum spend, putting this advertising within reach of any business … brands are using our capabilities to reach engaged viewers.”

As for Shopify, the company’s Merchant Solutions segment was up more than 21% to $1.6 billion in the most recent quarter. The company’s offerings help enterprises build storefronts, accept payments and advertise through the Shopify app, per the company’s latest annual filing.