The partnership between the big-box retailer and the Canadian e-commerce platform is twofold: Walmart can continue to grow its online business — which surged 74 percent during the most recent quarter — while Shopify’s third-party sellers have the chance to sell goods on Walmart’s web site.
“As we launch this integration with Shopify, we are focused on U.S.-based small and medium businesses whose assortment complements ours and have a track record of exceeding customers’ expectations,” Walmart said in a statement. “We’re excited to be able offer customers an expanded assortment while also giving small businesses access to the surging traffic on walmart.com.”
The move is also an attempt to compete with e-commerce giants like Amazon and Chinese platform Alibaba, both of which already allow small and medium-size businesses the chance to sell on their web sites. Many of those small businesses are struggling to stay afloat amid the coronavirus pandemic, which has caused consumers to shelter in place and turn to online shopping at unprecedented levels.
Meanwhile, Walmart said last month that it was discontinuing Jet.com, the e-commerce start-up it acquired in 2016 for $3.3 billion. But Walmart’s push to expand its digital presence is far from over. The retailer said more than one million businesses use Shopify. Walmart hopes to add roughly 1,200 Shopify sellers to its platform this year.
“Competition in this important segment of online retail is heating up, with Amazon remaining the unquestioned leader,” said Charlie O’Shea, Moody’s vice president. “However, the ability of Walmart to offer space in stores, as well as placement on its web site for select retailers as it has with Advance [Auto], is a key competitive advantage that certainly has the potential to attract additional relationships.
“The affiliation with Shopify is a further indication that Walmart will continue to focus heavily on expanding its third-party relationships, building on the success thus far of its tie-up with Advance Auto,” O’Shea continued.
Shares of Walmart, which opened about 0.10 percent down Monday morning, are up approximately 8 percent year-over-year.