Wal-Mart Ramping Up Online Effort To Capture Global Revenue
April 06 2010 - 9:09AM
Dow Jones News
Wal-Mart Stores Inc. (WMT) is stepping up the pace of its
international e-commerce expansion, looking for staff, talking to
vendors and mapping its approach to what could become one of the
world's biggest Internet initiatives.
Wal-Mart wants to mix the best of what is already offered with
new elements that could allow the company to sell from the U.S.
into overseas markets and also use its presence in other countries
to serve as springboard for online sales, said Steve Nave, general
manager of Walmart.com.
"You'll see a hybrid" of what has existed for Wal-Mart and in
general, Nave told Dow Jones Newswires.
The initiative will employ the reach and resources of the
world's biggest retailer to see if it can capture a greater share
of the billions of dollars that are being spent online annually, an
amount that has been growing.
Wal-Mart already pulls in the most sales of any retailer - $405
billion last year, including about $100 billion from international
operations in 14 countries. While the company doesn't disclose
Internet sales, indications are the retailer has a lot of growing
room. Trade publication Internet Retailer estimated that Wal-Mart's
e-commerce sales in 2008, the latest projection available, were
$1.74 billion. That compared with No. 1 ranked Amazon.com at $19.2
billion and No. 2 Staples Inc. (SPLS), at $7.7 billion. Other
brick-and-mortar retailers like Office Depot Inc. (ODP), OfficeMax
Inc. (OMX), Sears Holding Corp. (SHLD) and Best Buy Co. (BBY)
outranked Wal-Mart in Web sales, with Wal-Mart only entering the
list at No. 13. This was before Wal-Mart said it was making a great
push to improve online sales.
A bigger international foray into the Internet "would increase
global revenue by exposing Wal-Mart to a new buyer base that has
financial capabilities and is interested in buying from the U.S.,"
said Bobby Frank, chief executive of BorderJump LLC, a provider of
global e-commerce services like payment processing. "These
consumers want better prices, selection and brand names they cannot
find locally."
Wal-Mart during the past two weeks began advertising for a key
architect of the global e-commerce effort, the program's director
of market development. Qualifications for the position, which pays
over $100,000 a year, suggest where Wal-Mart may be focussing its
expansion. Fluency in one or more of the following languages -
Mandarin, Cantonese, Japanese, Portuguese, Spanish, Hindi and
French - is a plus, the job posting says.
The international e-commerce group, or global.com as Wal-Mart
calls it, has as its executive vice president and chief operating
officer Wan Ling Martello, formerly the chief financial officer of
Walmart International. Martello was named to the new spot early
this year.
Wal-Mart's Brisbane, Calif., global operation is also looking
for project managers and market development directors, according to
postings the retailer has placed. Brisbane is also where the
company's U.S. online operation is based.
The mission of Wal-Mart's global.com initiative is to allow
customers to "be able to experience the brand wherever and whenever
they want," Vice Chairman Eduardo Castro-Wright said in
February.
Castro-Wright said Wal-Mart would pursue e-commerce
opportunities around the world, whether it be in developed markets
where the retailer already has stores or as an online presence in
markets where it does not.
Wal-Mart already has established online operations in countries
including the U.S., the U.K., through its Asda chain, and
Brazil.
Areas of opportunity include India, where Wal-Mart is building a
presence through stores that are part of a joint venture. Wal-Mart
also operates in China, through a joint-venture and controlled
subsidiaries. In Japan, Wal-Mart operates Seiyu stores.
Aside from setting up Internet sales units for other countries,
Wal-Mart is talking with some outside service providers, like
BorderJump LLC, to help the retailer sell overseas from the U.S.
These intermediaries would receive shipments from Wal-Mart in the
U.S. and parcel them out to international destinations. This could
free Wal-Mart from having to invest in an operation to handle
currency exchange, customs clearance, duties and overseas
deliveries.
Wal-Mart has a strong foundation from which to build, said
Maggie Gilliam, president of Gilliam & Co., a retail consulting
firm. "They have a very well developed system in this country. The
logical next step is extending into something more global."
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com
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