Wal-Mart’s online sales grow more than 30% in Q1
May 16, 2013 12:26 PM
Wal-Mart Stores Inc. reported today that its online sales grew more than 30% in the first quarter of the year, and said it planned to expand its e-commerce operations in key markets around the world. The figures cover Wal-Mart’s fiscal first quarter, which extended from Jan. 26 to April 26.
“E-commerce will continue to grow in importance for our company,” chief financial officer Charles Holley said today in a presentation to analysts. “During the quarter, e-commerce sales increased by over 30%, and we continue to make strategic investments in the markets that offer us the greatest growth opportunity. We’re focusing this investment in key areas, including our global technology platform and next-generation fulfillment networks, as well as scaling additional markets around the world.”
Wal-Mart did not say how much e-commerce made up of the retailer’s $114.2 billion in global sales in the first quarter. But the comments suggested that online growth is accelerating, perhaps faster than anticipated.
Neil Ashe, Wal-Mart’s global head of e-commerce, projected in March total e-commerce sales of $9 billion this year. Global online sales for Wal-Mart, No. 4 in Internet Retailer’s recently released 2013 Top 500 Guide, totaled $7.7 billion in 2012, according to Internet Retailer’s estimate. 30% growth would put Wal-Mart’s web sales at $10 billion this year.
Wal-Mart’s e-commerce strategy is focused on four countries—the U.S., United Kingdom, Brazil and China—and the company reported today progress in all four. Holley said Wal-Mart increased its e-commerce market share in Brazil, China and the U.K., but did include the U.S. on the list. Here’s a breakdown of other comments Wal-Mart executives made about those four markets:
- In the U.S., Wal-Mart now ships online orders from 35 of its 4,000 U.S. stores; it previously had reported shipping from 25 and that it expected to raise that to 50 by year’s end. Traffic to the retailer’s U.S. e-commerce site, Walmart.com, exceeds 45 monthly visitors, “and growth and conversion are accelerating,” Holley said. While not discussed today, Wal-Mart announced yesterday it had acquired two online technology startups and planned to hire 150 more staffers for its Walmart.com operations in Silicon Valley, which already employ 1,500.
- In the U.K., the Asda supermarket chain that Wal-Mart owns is the country’s second-largest online grocer, Wal-Mart says. Asda completed the rollout of Wi-Fi to its stores in the first quarter, making it easier for customers and employees to connect to the Internet via mobile devices. Asda also expanded its Click and Collect service that lets customers pick up web orders in stores to 100 stores, and opened a third e-commerce fulfillment center in Nottingham.
- In Brazil, online sales grew more than 40% in the first quarter and Walmart.com.br is now the most heavily visited e-commerce site, Wal-Mart claims.
- In China, Yihaodian, an online retailer that Wal-Mart bought a controlling interest in last year, now offers same-day delivery in Beijing, Shanghai and Guangzhou. Yihaodian is No. 42 in the Internet Retailer Asia 500.
Wal-Mart plans to expand its e-commerce operations in such markets as Japan, Mexico and Canada, said Doug McMillon, president and CEO of Walmart International. But he provided no details.
While not providing a dollar estimate, Holley said Wal-Mart’s e-commerce investments would impact earnings by 2 cents per share in the second quarter and 9 cents per share for the year. As Wal-Mart has 3.31 billion shares outstanding, that suggests e-commerce investment in Q2 of about $66 million and for the year of $300 million.
Wal-Mart’s global sales increased 1.8% to $114.2 billion and its operating income grew 1.1% to $6.5 billion in the first quarter, the company said today.
Wal-Mart is the world's largest retailer by sales.