Walmarts eCommerce Ambitions

While the total net sales of Walmart stagnate, the eCommerce net sales are rising. We are looking at the potential reasons.

 

Source: Annual Report Wal-Mart Stores, Inc. 2017

 

Although the yearly growth-rate of Walmart U.S. is above 3 percent, global net sales stagnate at about US$ 480 bn. In contrast, the eCommmerce share is increasing with a growth-rate that is slightly above the average growth-rate for the relevant category. One reason might be the capital allocation.

 

Source: Annual Report Wal-Mart Stores, Inc. 2017

 

We are comparing the total capex spent in 2015 and 2018. Although the total amount is decreasing from US$ 12,2 bn to US$ 11,0 bn, the share for eCommerce and technology is increasing. An effect, that is also positively supported by the increasing amount spent for logistics. When one share is growing, another must drop: new stores and clubs, representing almost 50 percent of the total capex spent in 2015 represents less than a quarter in 2018. What did Walmart invest in?

 

Source: Annual Report Wal-Mart Stores, Inc. 2017

 

Especially in 2017 Walmart was focused on acquiring different online stores that covered the categories fashion as well as furniture & homeware and sports & outdoors. Part of the acquisitions are for example shoes.com and bonobos.com.

 

 

 

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March 2018