Walmart Expands Marketplace Services, Offers Logistics and Fulfillment to Boost Holiday Sales

Walmart is expanding its marketplace services to help sellers prepare for the holiday season by offering logistics support, fulfillment, and waiving peak-season storage fees. This move is part of Walmart's strategy to strengthen its marketplace business and compete more effectively with Amazon in third-party sales.

Walmart Enhances Marketplace Services with New Logistics and Fulfillment Options Ahead of Holiday Season

To fortify its marketplace business in anticipation of the holiday season, Walmart announced on August 27 that it would offer marketplace sellers its services to manage the transportation of their goods from Asia to its U.S. warehouses, fulfill orders, and manage returns from any e-commerce website.

Walmart's marketplace business has emerged as a significant revenue source as it endeavors to bridge the gap in its third-party sales management with Amazon.

The announcements made by the world's largest retailer are in response to last week's unwinding of its stake in Chinese e-commerce retailer JD.com (9618. HK). Walmart's endeavors indicate that it seeks to manage more of its third-party business internally.

Additionally, Walmart will waive peak-season storage fees for third-party vendors who submit their inventories to its fulfillment centers before September 30 and provide cash advances.

Walmart's annual Marketplace Seller Summit included the announcement of these initiatives, which are intended to help sellers meet the demand for holiday purchasing and prepare for Walmart sales events. History has shown that these occurrences have frequently occurred in conjunction with Amazon's October Prime Day.

Walmart has aggressively expanded its Walmart.com marketplace in the past year, with a primary focus on merchants from China. The retailer generates revenue by promoting its Walmart delivery network or Walmart Fulfillment Services by these vendors, typically small businesses or independent stores, to fulfill orders and advertise their products on Walmart.com.

Walmart reported that its marketplace sales have increased by more than 30% in the past four quarters, which has substantially contributed to its global e-commerce sales, which surpassed $100 billion last year.

Walmart's Marketplace Expands to 420 Million Products but Still Trails Amazon in Merchant Network

According to Marketplace Pulse (via Reuters), a research firm, Walmart has a marketplace with over 420 million products and over 100,000 active vendors, more than one-third of which are located in China. Nevertheless, it continues to lag behind Amazon, which has a network of over 2 million active merchants.

Walmart also disclosed that merchants could dispatch orders to customers through its fulfillment service at rates that were 15% less expensive on average than those of its competitors. However, it did not disclose the names of its competitors. It also provided a service that facilitated the direct transportation of products from Asian ports of origin to its U.S. warehouses for third-party sellers.