Walmart Brasil dumps e-commerce

Reuters has reported that Walmart Brasil will be shuttering their e-commerce operation and focusing exclusively on brick-and-mortar. Underperforming hypermarkets will be converted into wholesale stores.

Wholesale is on the rise in Brazil as the country comes out of a recession. “The company is working in a new omnichannel strategy which will be later announced”, Walmart Brasil said in a statement on Friday, providing no further details How the company will go about an omnichannel strategy without e-commerce is unclear, as that is typically one of the key components of omnichannel strategy. It looks like they will be taking an old school brick-and-mortar approach in a world pre-online shopping, which is hard for most average consumers to imagine at this point.

Walmart has been attempting to get e-commerce off the ground in Brazil for years, but the effort has proven to fall flat. Walmart's top competitor, Amazon, will be launching a fulfillment center in Brazil, shaking up the country's retail sector. Despite Walmart's failure to successfully launch e-commerce in the country is not a lost cause. Walmart's troubles partially stemmed from their inability to compete with other e-commerce companies including B2W, Via Varejo and Magazine Luiza SA.

Walmart launched e-commerce in Brazil in 2011, but by 2017 the retailer had turned it into a marketplace for third party sellers. In 2018, Advent International bought an 80 percent stake in Walmart Brasil as their e-commerce channel continued to suffer. The company has laid off 70 of its 90 e-commerce staffers, with 20 left dedicated to fulfilling remaining orders.

Amazon could greatly benefit from no longer having to worry about one of its top competitors. As the e-commerce giant continues it quest for global retail domination, Walmart is still seen as one of its primary competitors. As countries, like America, move more toward e-commerce, Latin American countries still find brick-and-mortar key. Walmart's wholesale strategy might work out in their favor as they also plan to add more Sam's Club stores as well, bringing their brick-and-mortar presence in the country to an impressive fleet of 10 Maxxi Atacado stores and 10 Sam's Club stores.

photo: corporate.walmart.com