Wal-Mart Steps Up Its E-Commerce Game, But Can It Ever Compete With Amazon?
For the first time in more than a decade, Wal-Mart (NYSE:WMT) has outdone online retailer Amazon (NASDAQ:AMZN). The company’s online sales grew faster than the e-commerce giant’s figures last year, though Wal-Mart’s total online sales were still dwarfed by Amazon’s.
According to a Monday report from The Wall Street Journal, Wal-Mart’s online sales grew 30 percent in 2013, to about $10 billion; the discount retailer’s growth surpassed Amazon’s online sales growth, which increased by just 20 percent in the same period.
The publication notes that Amazon’s sales still tower over Wal-Mart in terms of scale. The online retail giant is just that: a Goliath in the e-commerce sphere, taking in more sales than its 10 biggest competitors — which include Wal-Mart, Staples (NASDAQ:SPLS), and others — combined in 2013. In total, the company boasted $67.8 billion in online sales last year, more than six times Wal-Mart’s total sales, according to the Journal.
Despite Amazon’s continued success, Wal-Mart is not ready to give up without a fight. Indeed, the big-box retailer, known for its discount prices, is intent on giving the company a run for its money: Wal-Mart has invested more than $500 million in the past few years to bring its discount retail business into the Internet age, buying up 12 e-commerce businesses in the past three years alone.
Wal-Mart has also its expanded its lineup of online fulfillment centers to include three new warehouses in Texas, Pennsylvania, and Brazil, along with hiring 1,000 new tech-savvy employees out of the Silicon Valley, The Wall Street Journal reports.
Further, Wal-Mart’s most recent acquisition could help the company to work smarter rather than harder in its race against Amazon. On Tuesday, the retailer is expected to announce the purchase of search engine marketing company Adchemy, which will help the retailer optimize its search terms and compete against Amazon in online searches before customers even get to the retailer’s website.
The company isn’t planning on shirking its stream of funding for its e-commerce division any time soon, either. In February, Wal-Mart announced that it planned to invest an additional $150 million on developing its e-commerce business, and it hopes to reach $30 billion in online sales by the end of 2014.
Amazon, for its part, is encroaching on Wal-Mart’s territory, too: Last week, the company announced the debut of a new service called Amazon Prime Pantry, which allows customers to buy everyday items in bulk packages and offering an impressive discount. Even more recently, Amazon announced the expansion of its same-day delivery service to several new cities.
Wal-Mart also now offers online grocery services and same-day delivery to certain locations. To investors, the competition between these two may occasionally seem like a classic case of “monkey see, monkey do,” or perhaps, better yet, a case of “anything you can do, I can do better.”
Wal-Mart’s chief executive of its e-commerce division, Neil Ashe, says he is optimistic about the company’s future in a world still dominated by Amazon. Ashe said in an interview with The Wall Street Journal that he expects Wal-Mart to be able to match the range of products currently carried by Amazon, along with the retailer’s speedy shipping times, in about two years’ time.
Ashe also mentioned to the publication that the company is hoping to expand its e-commerce business into countries where it currently doesn’t have stores, a deviation from the division’s current focus on online markets in the U.S., U.K., Brazil, and China. “I fully expect us to be serving countries through e-commerce in the future,” he said to the Journal on Monday.