Wal-Mart looks to boost e-commerce in Mexico with a $1.3 billion investment
December 12, 2016 10:31 AM
Wal-Mart Stores Inc.’s e-commerce operations in Mexico will benefit from the retailer’s decision to invest $1.3 billion in logistics improvements, which primarily involves building new distribution centers—for e-commerce as well as its physical stores—and expanding and updating existing its fulfillment facilities, a spokesman for the retailer said Friday.
Wal-Mart de Mexico executives announced the investment and the 10,000 jobs it is expected to create in Mexico on Wednesday during an event with Mexico President Enrique Pena Nieto.
Wal-Mart has not yet decided yet where the distribution centers will be located or their sizes, a spokesman from the retailer’s Latin America operations tells Internet Retailer. “We expect most of the investment to be made in the next three years, however the [distribution centers] will need to be built as we continue to open stores in areas farther from our existing or new [centers],” he says. “We cannot share details of space or systems, but the investment also considers the modernization and expansion of some of our existing [distribution centers].”
In its earnings report for its fiscal third quarter ended Oct. 28, Wal-Mart said e-commerce in Mexico grew by about 20% in the fiscal third quarter. The retailer said U.S. e-commerce accelerated more quickly than the global figure, but did not provide an exact figure for that growth. It said sales at its 11 e-commerce sites worldwide grew 20.6% year over year in the quarter, and that gross merchandise value—the total value of goods sold on its e-commerce sites—increased 16.8%.
Mexico is Latin America’s second-largest economy, behind Brazil, and its online sales are expected to grow 107% to $6.0 billion by 2018 from $2.9 billion in 2015, according to Forrester Research. The 52 Mexican merchants in the Internet Retailer 2016 Latin America 500 increased their web sales 23.3% to $1.93 billion, according to Top500Guide.com data.