Walmart makes e-commerce adjustments following power shift in international markets

Posted by admin on Aug 31, 2017 12:04:52 PM

In recent quarters, Walmart reported slowed growth for their e-commerce department. According to Business Insider, the legacy retailer went from 16 percent growth in the second quarter of last year to single digit growth for two straight quarters. Despite rebounding this quarter and online sales growing by 60 percent, according to Forbes, Walmart is looking for new ways to compete within the e-commerce market, especially considering new tech giants have begun crossing international boundaries and increased competition.

American corporations, which have long held market dominance, are finding Chinese tech giants pushing their way into prominence alongside names such as Microsoft, Apple and Amazon. Alibaba and Tencent, China's largest tech corporations, have each reached values of $400 billion collectively, an accolade previously held exclusively by American corporations. According to Internet Live Stats, China has the largest population of Internet users with roughly 721 million accounting for over half of their total population. The United States ranks third, with roughly 286 million users, but representing 88 percent of the total population. Technology adaption rates have increased within the United States, especially among older generations.

Chinese consumers traditionally spend more on e-commerce than American consumers.

We’ve come to the point where China has finally caught up with the U.S. in the internet space,” -Hans Tung, managing partner at GGV Capital, 2017

In response to increasing competition in the international e-commerce market, Walmart sold their Chinese e-commerce company Yihaodian, according to Business Insider. Yihaodian was sold to JD.com, one of China's leading e-commerce platforms, in exchange for a 5 percent stake in JD's company. According to The New York Times, the Chinese economy grapples with a multitude of difficulties, including rising debt and a reliance on the steel industry. Despite this, Chinese technology and e-commerce businesses reported earnings in recent quarters that exceeded investor expectations. The Chinese retail e-commerce economy has grown without the influence and presence of legacy retailers, unlike in the United States. In China, and other undeveloped regions without legacy retailers, e-commerce platforms have taken hold and experienced unprecedented growth.

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