Walmart ends ecommerce operations in Brazil to focus on B&M
Reuters, Monday, May 13, 2019
Walmart Brazil has revealed it will shutter its ecommerce operation to focus on brick-and-mortar formats, converting underperforming hypermarkets into wholesale stores, including 10 Maxxi Atacado locations by 2020, as well as 10 Sam’s Club stores.
Walmart’s ecommerce in Brazil has struggled in the face of tough domestic competition from B2W, Via Varejo and Magazine Luiza SA, as well as a rampant Amazon. In August 2018, Walmart sold an 80% majority stake in its Brazilian unit to Advent International, a private equity investor that is now working to transform a struggling low-growth business, with aggressive discount policies and a stronger wholesale element – an booming channel in the face of Brazil’s large independent trade sector.
Suppliers looking to invest in Brazil must prioritize residential small-box stores, the most popular channel in Brazil‘s highly-urbanized society. Walmart’s actions do not however reflect the longer-term digital opportunity, with the online share of chain retail set to rise from 13% to 17% in the five years to 2023. With an advancing ecommerce segment, led by mobile devices, suppliers should explore opportunities with must-win retail partners, such as Lojas Americanas, Casino and Amazon.