Third-Party Marketplaces and Amazon vs. Walmart

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In what will likely be a never-ending duel between Amazon and Walmart as their online platforms expand, it’s seller-driven marketplaces — integrating everything from catalogs to fulfillment — that will help create an edge. competitive.

Platforms, of course, are always expandable, and operators can add new services and products at the push of a button (OK, we know it’s not that simple).

And in an effort to increase critical mass among sellers around the world, helping businesses scale (and platforms scale along with them) is a major selling point, driving loyalty from enterprise customers.

Strategy is important for walmartwho stated in his earnings conference call Tuesday (Aug. 16) that the number of sellers in its marketplace grew 60% year over year, with 240 million items in its U.S. e-commerce assortment.

The company also noted that its global advertising business grew by around 30% over the same period, led by Walmart Connect and Flipkart. John Furner, president and CEO of Walmart in the United States, said that “the growth of the market and e-commerce helps us all to be able to identify the right sellers and suppliers that we can connect with”. Later in handling calls, he noted that Walmart Go Local was celebrating its first anniversary and had passed 1 million deliveries.

Helping sellers access the market

For sellers setting up a (virtual) store on Amazon and Walmart marketplaces, the opportunity is there to expand the customer base and increase revenue; by connecting to these marketplaces, they can also have a number of core functions (such as fulfillment through Walmart Fulfillment Solutions) automated, in exchange for a commission being paid on sales tied to those in the marketplace.

Walmart said its marketplaces have 120 million monthly visitors. Integration can be done through the API or by choosing a third-party vendor to go live on Walmart.com.

It is “sponsored” advertising that can help small merchants get their brands out to a wider audience and design campaigns that can be personalized on a market-by-market basis.

The marketplace is an integral part of Walmart’s digital strategy, as evidenced by the fact that the company’s e-commerce business in the United States grew 12% year-over-year, outpacing the growth of 3% (ex-fuel; 6% including fuel) observed in US same-store sales. .

Amazon Marketplace, aimed at third-party retailers, has also grown (unsurprisingly). As reported late last month, the company launched its seller wallet, enabling cross-border fund flows more efficiently. For Amazon, the use of third-party sellers is essential, because nearly 50% of sales come from this channel. The company said on its last earnings call that 57% of all units sold in the second quarter came from the third-party seller market.

Amazon said earlier this year that Buy With Prime will allow select Amazon merchants to sell their listed merchandise directly from their own websites, with payment and fulfillment services available at checkout.

The contest will continue between Amazon and Walmart over key spending categories such as groceries and gas…and the contest will also continue over capturing the online presence of third-party sellers in their respective markets.

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