Ecommerce and international driving growth at Walmart
The world’s biggest (bricks-and-mortar) retailer reported another strong quarter of revenue growth, with +6%. Of the three big segments, International grew fastest, with +12% growth.
However, the US, the most mature and by far the biggest (67% of revenue) market, also continued steady growth with +4,6%.
Both International and US revenues grew driven by the online channel. In the US, online sales grew by a strong +22%. Walmart’s strong online growth can be seen when compared to Amazon, which grew North American retail revenues by 12,5%. Amazon’s product sales grew only by 6,9%.
One can say that Walmart outrgew Amazon handsomely albeit growing from significantly lower base.
As the online business grew rapidly, the US store business seen rather low revenue growth over the last 12 months. For the 12 months, online has represented more than 50% of growth in the US business. Quite a significant shift for the biggest store-based retailer in the world. During the last quarter, online produced 66% of growth.
In Q1/2024 online represented 16,1% of Walmart’s US sales.
According to the company, the growth in the online channel came from “double-digit increases in store-fulfilled pickup and delivery.” The advertising business grew by +26%.
Of the overall growth, the International segment and the US online channel represented 36% and 35,5% of all growth for Walmart. For the International segment, online was also the growth driver, with +19% growth compared to the overall 12% growth.
According to Walmart, online is still unprofitable, but it drives significant new revenue and adds incremental profits for the business.