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HomeRetailWalmart Embraces China’s E-Commerce Strategy to Compete with Amazon and Temu

Walmart Embraces China’s E-Commerce Strategy to Compete with Amazon and Temu

Walmart is rapidly expanding its online marketplace by onboarding more Chinese sellers, aiming to catch up with Amazon and Temu’s successful strategies. This shift marks a significant transformation for the retail giant as it adapts to the evolving e-commerce landscape.

Walmart’s New Approach to E-Commerce

Walmart’s online marketplace has seen a dramatic increase in Chinese sellers, who now make up a staggering 73.8% of new sellers as of April 2024. This surge follows Walmart’s decision in 2021 to open its platform to international sellers, a move driven by competition from Amazon and Chinese e-commerce giants Temu and Shein.

Key Statistics:

  • April 2023: 1.8% of new sellers on Walmart Marketplace were from China.
  • October 2023: 24% of new sellers were from China.
  • April 2024: 73.8% of new sellers are from China, a record high.

Why Walmart is Embracing Chinese Sellers

Historically, Walmart’s marketplace was restricted to American-based companies, but increasing pressure from rivals has led to this strategic shift. Amazon’s dominance with a significant share of third-party vendors and the explosive growth of Temu, which became the most downloaded app in the U.S. in 2023, prompted Walmart to broaden its seller base.

Juozas Kaziukėnas, CEO of Marketplace Pulse, explains that Walmart’s move aligns with a broader industry trend where major marketplaces are increasingly integrating international sellers.

What This Means for Walmart and Its Competitors

Walmart’s strategy has introduced a wave of Chinese brands into the U.S. market. This includes a mix of well-known American brands and lesser-known Chinese manufacturers. For example, searching “bike tire” on Walmart.com shows both popular brands like Blackburn and numerous Chinese brands like Hycline and Coofit.

John Forrest Ales, a Walmart spokesperson, confirmed that while the company is experiencing rapid growth in the number of Chinese sellers, they are still a small part of the overall marketplace.

In comparison, Amazon’s third-party vendors, largely based in China, are set to account for 66.8% of its online sales this year. This contrasts with Walmart’s 11.3% reliance on third-party vendors, though Walmart’s recent efforts indicate a move towards a more Amazon-like model.

The Impact of Chinese Sellers on the U.S. Market

Temu’s rapid success since its U.S. launch in September 2022 demonstrates the potential of direct-to-consumer models. The app’s success, driven by affordable Chinese goods, highlights a growing trend where Chinese e-commerce platforms are expanding into the U.S. market.

Sky Canaves, Senior Analyst at eMarketer, notes that there is a significant demand among Chinese sellers to enter the U.S. market, driven by a softening consumer economy in China.

What’s Next for Walmart?

As Walmart continues to expand its Chinese seller base, it faces both opportunities and challenges. The company plans to capitalize on the increasing influx of Chinese products while balancing quality control and competition from established American brands.

Walmart’s recent initiatives include:

  • Launching a Chinese-language Seller Central dashboard in February.
  • Hosting a seller summit in Shenzhen in March to attract new sellers.

Future Outlook

With the U.S. e-commerce market evolving, Walmart’s strategy to embrace international sellers represents a significant shift. As competition intensifies, Walmart aims to leverage this new approach to compete more effectively with Amazon and Temu.

Stay updated with QuickPost.News for the latest developments in e-commerce and retail trends.

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