- General
- July 4, 2019
- 5 minutes read
Walmart E-commerce Reportedly Projecting Over $1 Billion 2019 Loss
Walmart U.S. CEO Greg Foran image: Walmart A new piece from Vox’s Recode has shed light on some struggles at Walmart’s…
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| Walmart U.S. CEO Greg Foran
image: Walmart
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A new piece from Vox’s Recode has shed light on some struggles at Walmart’s e-commerce division as it battles to compete with Amazon. Vox’s report touched on said issues going on at Walmart’s e-commerce division, including conflicts from executives and increasing pressure on top e-commerce executive Marc Lore to cut losses. Marc Lore took over Walmart’s e-commerce division after the retailer acquired his e-commerce startup, Jet.com for $3.3 billion in 2016.
Vox’s report also said Walmart’s e-commerce division is projecting losses of more than $1 billion this year, on revenue of between $21 billion and $22 billion. These figures are not official [as Walmart doesn’t publicly disclose revenue from its e-commerce division] but offers a hint into Walmart’s intense battle with Amazon. The retailer best known for its physical stores has to spend heavily to keep up with Amazon, which controls nearly 38% of the U.S. e-commerce market [according to eMarketer estimates], compared to Walmart’s 4.7%.
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| Walmart packages being processed at a U.S. fulfillment center
image: Walmart
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Vox’s report says Walmart’s CEO Doug McMillon and the company’s board of directors are not happy about money-losing initiatives, leading to increasing pressure on Lore who has pitched the company’s management and board on the idea that it has to spend heavily to compete with Amazon. Walmart at most has 20 fulfillment centers in the U.S., compared to Amazon’s 110 U.S. fulfillment centers. The company’s in-store selection is also not big enough to leverage its stores as fulfillment centers on a scale that’ll compete with Amazon’s product catalog.
Vox’s report also says Walmart has considered a sale of Bonobos [a menswear brand it acquired for $310 million in 2017] and ModCloth [a womenswear brand it also acquired the same year]. The report says Walmart considered but rescinded on a sale of Bonobos but will likely sell ModCloth — probably for less than it paid for the brand — this year.
