Walmart Inc. (NYSE: WMT) is keenly focused on its ecommerce initiatives as part of its efforts to compete effectively with Amazon (NYSE: AMZN). The retailer has invested significantly in this area to drive growth, including the acquisitions of various smaller companies. However, the ecommerce sales trend has seen fluctuations over the past couple of quarters.
Looking at the trend over the past two years, Walmart saw strong US ecommerce sales growth of 60% in the second quarter of 2018. This growth was driven by the positive response of customers to new initiatives undertaken by the company as well as an improvement in assortment, which was aided by the acquisitions of retailers like Moosejaw and Bonobos.
In the third quarter of 2018, ecommerce sales dipped to 50% as the company had started to absorb the effects of the Jet.com acquisition in the middle of the quarter. Sales sharply fell to 23% in the fourth quarter of 2018 due to the impacts from the Jet.com acquisition as well as other operational issues that negatively affected growth.
Sales picked up in the first quarter of 2019 to 33%, driven by strength in online grocery. In the second quarter, Walmart rolled out new initiatives to improve customer experience. This included bringing new features to shopping categories and adding new brands. The company saw a steady rise in sales growth during the first three quarters of 2019, with the fourth quarter remaining flat versus the third.
In the first quarter of 2020, ecommerce sales dropped to 37% from 43% in the fourth quarter of 2019, reflecting impacts from SNAP funding. Sales in the second quarter of 2020 remained flat sequentially at 37%, despite strength in online grocery.
Walmart is focused on increasing the number of monthly active users, lowering costs and improving margins. The company is investing significantly in this space and believes there is opportunity for further expansion in the ecommerce marketplace.
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