Walmart Expands into the Secondhand Market to Boost its Online Marketplace

Walmart’s Secondhand Strategy: Key Insights

• Expanding Product Range: Walmart is expanding its eCommerce platform by adding pre-owned watches, collectible trading cards, and high-end beauty products to attract more customers and compete with Amazon and eBay.

• Sustainability Trend: Walmart is responding to consumers' growing preference for secondhand products as they seek more sustainable, price-conscious online shopping options.

• Marketplace Success: Walmart’s marketplace has seen sales increase over 30% for four consecutive quarters, with strong growth in pet products and beauty categories.

Walmart is ramping up its eCommerce strategy by adding pre-owned watches, collectible trading cards, and high-end beauty products to its online marketplace. The move expands Walmart's selection of secondhand products and reinforces the trend toward sustainable shopping.

In doing so, the company aims to attract more customers and challenge rivals such as eBay, Inc. and Amazon.com, Inc. But there is more to this move.

Walmart Enters the Recommerce Market

Tom Ward, Walmart's Chief eCommerce Officer, explained that "when customers search for something, they want to see a variety of results, not just a few." The expanded product range, which now includes brands previously unavailable on Walmart’s platform, meets growing customer demand and is expected to drive sales. Among the new brands are luxury brands such as Michael Kors and Cartier.

The hybrid marketplace model allows Walmart Inc. to diversify its product offerings and price points, as it combines first- & third-party products. It also facilitates investment in more pre-owned products as the trend toward more sustainable shopping methods, such as recommerce and secondhand shopping, continues to grow.

Walmart’s Online Marketplace: A Success?

As we look at the latest data provided by ECDB, the forecast for the company’s net sales 2024 does not look so shiny. At the same time, Walmart's marketplace has been a significant growth driver for its eCommerce business.

Walmart reported that marketplace sales have increased by more than 30% for four consecutive quarters. Categories like pet products and beauty are experiencing annual growth rates of 20% to 30%. The company is also expanding its fulfillment services, offering more shipping options and even handling international transportation from Asia to the U.S.

The company reported a 22% increase in U.S. online sales last quarter, with a steady uptick in weekly active customers. To support this growth, Walmart focuses on reducing eCommerce costs and has assured investors of a path to profitability. Perhaps the company can turn things around by the end of the year and improve its eCommerce net sales.

Sources: Bloomberg, ECDB