Walmart VS Amazon, the next big online retailer (Walmart DD). Why my money is on Walmart (WMT)

by StonksArthur

Walmart Due Dilligence

PARTNERSHIPS

– Partnership with Instacart

Recently Walmart and Instacart have founded a partnership that will allow Walmart to use Instacart their same-day shipping service. [Walmart and Instacart together make up for nearly 50% of the online grocery sales.]( secondmeasure.com/wp-content/uploads/2019/08/GroceryDelivery-chart2png-1024×631.png) Walmart’s vast inventory and Instacart their network and experience will only strengthen their position as the dominant grocery delivery providers, and thus putting more pressure on Amazon.

– Partnership with Shopify

In addition to Instacart Walmart has also partnered with Shopify. This new partnership will allow third-party sellers to directly sell their item’s on the Walmart marketplace. This new partnership will greatly expand Walmart’s inventory while giving small businesses the opportunity to reach a bigger demographic. Walmart is expecting to add 1200 Shopify sellers in 2020. Listing an item on Walmart’s marketplace allows Walmart to pick up some fees and generate greater traffic to the website. Another interesting possibility to consider is the fact that Walmart could be used as a Shopify returns hub, with a Walmart being within 10 miles of 90% of the US population it is the ideal candidate for further strengthening their relation with Shopify and saving both parties a lot of money.

– Partnership with ThredUp

Walmart has also partnered with Thredup. ThredUp is basically an online thrift shop for clothes and wearable’s. This brilliant partnership means Walmart can now offer both normal and high-end clothing on their marketplace for an affordable price and expose customers to nearly 750,000 pre-owned items. Who would’ve ever thought you could tell someone that you bought your Michael Kors or Calvin Klein at Walmart.

– Google

Walmart has been partners with Google for over 3 years now. This partnership allowed Walmart to enter the domain of voice ordering groceries. Simply ask one of your Google devices to buy milk and it will add milk to your Shopping cart. This Partnership might just be the beginning of a strong bond between Google and Walmart as both companies are interested in competing with Amazon.

– Microsoft (+ Possible TikTok acquisition)

Walmart has been partnered with Microsoft for about 2 years with 3 more years to go.

Since the partnership Walmart has been using the full range of Microsoft cloud solutions in a bid to accelerate their digital transformation, innovation and efficiency.

Acquisitions

– Bonobos, ModCloth, ShoeBuy, Moosejaw, Parcel

Let’s start at the beginning, with these acquisitions Walmart stated entering the e-commerce market in 2016-2017. Sadly as is known none of these are particularly success stories with the companies being sold again, being discontinued or CEO’s leaving. However Walmart learned a lot from these companies and has used this knowledge to further try to expand in the e-commerce market.

– Jet.com

The first big step in the fight against Amazon. When amazon acquired Jet.com it was a clear signal of what its intentions were. Jet.com was one of the fastest growing U.S. e-commerce companies and Walmart acquired them in September 2016. Since then a lot has happened, Jet.com has been discontinued but the knowledge, progress and technology gained due to Jet.com is irreplaceable and has given Walmart a brilliant boost into the e-commerce with their e-commerce sales increasing 29%. Furthermore (ex)CEO of jet.com Marc Lore is now the CEO of Walmart’s e-commerce.

– Flipkart

Ever heard of the small startup company called Flipkart? Maybe you have not, you should though. Flipkart owns 35% of the Indian e-commerce market, a true giant. Walmart acquired Flipkart in 2018 and ever since then it has been expanding its influence in India and fighting against Amazon for market dominance. This year Flipkart took over Walmart’s 28 Indian stores in order to expand its wholesale growth. Another interesting thing is that Walmart might make Flipkart public within the next 3 years.

– TikTok acquisition

Some very recent news of their Partnership with Microsoft is to potentially acquire TikTok. TikTok’s enormous userbase and the current pressure in the US and India have made for an interesting situation causing the partnership to push forward in the bid to acquiring TikTok. In my opinion Walmart has a very decent chance of getting TikTok and making it work. One factor that plays a big role in this is Walmart’s presence in India due to Flipkart. Flipkart is India’s biggest online store for; phones, electronics, books, home appliances, etc. With Walmart having a presence in both countries where TikTok is (going to be) banned might mean some positive things for the future, but for now that is speculation. The acquisition of TikTok would allow Walmart to use its genius algorithm and massive userbase to further promote and integrate its Walmart marketplace.

Walmart PLUS

Word is finally out, in September Walmart will be launching its Amazon competitor called Walmart plus. It will give numerous benefits to the user such as; Unlimited free delivery(with 2700 stores having same day delivery), fuel discounts and scan&go a tool to make shopping faster, all for the price of $98 per year

2 Hour Delivery

Walmart recently launches its new delivery service, called Express Delivery. This new service will allow customers to place their order online and receive their groceries (for a 10$ fee) within 2 hours. Walmart express delivery is currently available in 800 stores with plans to expand to 2000 stores. In addition to 2 hour delivery Walmart also offers same-day delivery in almost the entire United States.

5000+ US stores.

This is Walmart’s biggest weapon. The thing Amazon lacks the most is physical stores. Walmart has over 5000 stores while Amazon has just over 600 (worldwide!). If Walmart can find a way to combine e-commerce with its enormous physical presence then it could give Amazon an absolute run for its money. Remember that 90% of Americans live within 10 miles of a Walmart.

Some other interesting facts to consider.

– 90% of US population live within 10miles of a Walmart.

– Walmart’s e-commerce sales are currently up 97%

– Walmart’s expansion in Africa, India, China.

Conclusion/TLDR

Let me first state with you that this has been my first Due Dilligence and that English is not my first language.

Walmart is currently the underdog, and not many people are expecting them to properly fight Amazon. However its recent spree of partnerships and acquisitions have been a brilliant and very clear move in the direction of e-commerce. If Walmart fully utilized its massive physical network together when their growing fresh e-commerce, I see no other outcome then for Walmart to grow, grow, grow. Covid has given Walmart customers the push they needed to fully explore Walmart their marketplace, the marketplace that is now starting to fill up with thousands of sellers and endless products. Walmart VS Amazon, here we go, my money is on Walmart.

Sources:

Instacart:

secondmeasure.com/wp-content/uploads/2019/08/GroceryDelivery-chart2png-1024×631.png

www.forbes.com/sites/walterloeb/2020/08/12/walmart-teams-up-with-instacart-to-rival-amazons-fast-grocery-delivery/#3bde97546010

www.theverge.com/2020/8/11/21363507/walmart-instacart-partnership-same-day-grocery-delivery-amazon-whole-foods-rivalry

Shopify:

corporate.walmart.com/newsroom/2020/06/15/walmart-expands-its-ecommerce-marketplace-to-more-small-businesses

techcrunch.com/2020/06/15/walmart-partners-with-shopify-to-expand-its-online-marketplace/

www.forbes.com/sites/christopherwalton/2020/06/15/walmarts-new-shopify-partnership-is-another-stroke-of-digital-genius/#26a4e18e3025

ThredUp

www.forbes.com/sites/christopherwalton/2020/06/05/walmarts-thredup-partnership-is-the-best-digital-move-walmart-has-made-in-the-last-3-years/#265d62952172

www.walmart.com/browse/clothing/thredup-shop-all/5438_6272369_7404214

Google:

techcrunch.com/2019/04/02/walmart-partners-with-google-on-voice-enabled-grocery-shopping/

techcrunch.com/2017/08/22/walmart-and-google-partner-on-voice-based-shopping/

Microsoft + TikTok

techcrunch.com/2017/08/22/walmart-and-google-partner-on-voice-based-shopping/

news.microsoft.com/2018/07/16/walmart-establishes-strategic-partnership-with-microsoft-to-further-accelerate-digital-innovation-in-retail/

edition.cnn.com/2020/08/28/tech/walmart-tiktok-bid-hnk-intl/index.html

Bonobos, ModCloth, ShoeBuy, Moosejaw, Parcel

www.investopedia.com/articles/markets/102315/top-4-companies-owned-walmart.asp

Jet.com

www.cnbc.com/2020/05/20/walmart-ceo-on-buying-jetcom-we-would-do-that-all-over-again.html

www.fool.com/investing/2020/05/20/jetcom-may-be-history-but-walmart-got-what-it-need.aspx

Flipkart

economictimes.indiatimes.com/small-biz/startups/newsbuzz/flipkart-to-acquire-walmart-indias-wholesale-business/articleshow/77122766.cms

www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/flipkart-is-no-1-in-india-but-faces-formidable-foe-in-amazon-say-experts-54083920

corporate.walmart.com/newsroom/2020/07/23/walmarts-majority-owned-flipkart-launches-wholesale-business-to-help-small-businesses-in-india-source-directly-from-manufacturers-and-producers

www.livemint.com/companies/news/will-flipkart-ipo-set-the-ball-rolling-for-indian-unicorns-1561489450378.html

Walmart PLUS

www.tomsguide.com/news/walmart-plus-price-launch-date-and-everything-you-need-to-know

corporate.walmart.com/newsroom/2020/09/01/walmart-introduces-walmart

2 hour delivery

www.theverge.com/2020/4/30/21243557/walmart-express-delivery-two-hour-groceries-electronics#:~:text=Walmart%20is%20launching%20a%20new,during%20the%20COVID%2D19%20pandemic.

www.roadie.com/resources/press-releases/walmart-grocery-delivery

corporate.walmart.com/newsroom/2020/05/12/the-why-and-how-behind-walmart-express-delivery?irgwc=1&sourceid=imp_0iY1nOXZ4xyOUzQwUx0Mo3EHUkiVmiRxgxJy140&veh=aff&wmlspartner=imp_1943169&clickid=0iY1nOXZ4xyOUzQwUx0Mo3EHUkiVmiRxgxJy140&sharedid=

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.