In focus: Walmart Marketplace’s push to grow third-party seller base [Member-exclusive content]

The news:

Last week, Walmart Inc. launched another campaign to broaden a growing pool of third-party sellers listing on its U.S. online marketplace, this time extending the invite to Canadian retailers[1]. The move is a continuation of the merchant’s more recent plans for international expansion for that business arm.

The context:

Walmart Marketplace continues efforts to attract third-party sellers

In March 2021, Walmart stopped requiring its marketplace sellers to be registered in the U.S. and opened up its platform to foreign retailers[2]. Chinese manufacturers were a large part of the subsequent surge in outside sellers offering products on Walmart.com, and the company also actively began recruiting U.K. sellers[3] for its U.S. site in June.

Walmart has been in the Canadian market for decades and even operates a local marketplace through Walmart.ca, which the merchant says is “thriving.” But giving Canadian retailers the opportunity to access Walmart U.S.’s more than XX million monthly online shoppers will allow them to expand their cross-border operations by scaling stateside. The push “comes as local (Canadian) businesses — especially small- and medium-sized enterprises — are looking to reap the benefits of the Canada-United States-Mexico free trade agreement,” or CUSMA, according to a press release issued by the merchant. Walmart is focused on growing its marketplaces and “investing heavily” in new tools and services for sellers, says Darren Carithers[4], senior vice president of marketplace development for Walmart International.

Walmart is No. X in the 2022 listing of Digital Commerce 360’s Top 100 Global Online Marketplaces[5] and No. X in the Top 1000[6], a ranking of the top online retailers in North America.

Here’s a look at how Walmart Marketplace stacks up against competitors in terms of number of sellers and product inventory and a recap of consumers’ experiences and shopping behavior on marketplaces.

Product assortment entices consumers to shop on marketplaces

More sellers means more products. And a large part of the allure of marketplaces is the quantity and breadth of items that are available. Nearly a quarter — XX% — of consumers say the broader assortment of goods on these platforms is appealing, according to a Digital Commerce 360 and Bizrate Insights[7] survey of 1,000 online shoppers in May.

And a quarter — XX% — of respondents say a bigger selection of products in a merchandise category they’re browsing makes them more likely to purchase from a marketplace versus a traditional retailer’s ecommerce site.

How many sellers are on Walmart Marketplace?

So it’s no wonder that marketplace operators — especially mass merchant platforms with a variety of categories — court outside sellers and often use number of sellers as an indicator of the growth and overall health of their platform. In mid-August, during a call with investors discussing Q2 results, Walmart executives touted the company’s expanding third-party seller pool. The number of outside merchants listing on Walmart.com jumped about 60% year over year, said John David Rainey[8], executive vice president and chief financial officer.

Marketplace Pulse, a research firm that tracks data on online shopping mall platforms, estimates nearly XX third-party sellers currently have product listings on Walmart Marketplace, which launched in August 2009. That number is nearly 12 times higher than the roughly XX sellers on the platform just five years ago in September 2017. While the swell in Walmart Marketplace’s third-party merchants is notable, the total is still a far cry from the seller base of many other top online marketplaces.

EBay Inc. (No. X in the Top 100 marketplace rankings) leads the pack with XX million sellers. walmartoffers.com Inc. (No.

X in the Top 100 marketplace rankings and No. X in the Top 1000), Walmart’s main competitor, has XX million active sellers. Walmart ranks 19th when it comes to number of sellers among the Top 100 marketplaces, where the median is XX.

How many products are on Walmart Marketplace?

In the Q2 earnings call, Rainey said Walmart has grown to more than 240 million products in its U.S. ecommerce assortment.

The platform falls in third place among top U.S. marketplaces, with eBay coming in first with XX billion current listings. That’s nearly seven times the products on Walmart.com. And Amazon registers XX million.

The median number of products sold on Top 100 marketplaces is XX million, so Walmart has a huge lead over most other ranked platforms. Consumers notice the strides marketplaces are making in expanding product assortment. A third — XX% — of online shoppers reported seeing more items available on marketplaces relative to the prior year, according to the Digital Commerce 360 and Bizrate Insights May survey.

The Amazon angle:

Amazon leads in popularity among shoppers and GMV

Amazon still reigns supreme among U.S. marketplaces.

Seven in 10 — XX% — online shoppers reported making a purchase from an Amazon marketplace seller in the last year, according to the Digital Commerce 360 and Bizrate Insights survey in May. That’s compared to XX% of consumers buying from an eBay seller and XX% from a third party on Walmart Marketplace. That popularity among online shoppers is reflected in sales figures.

In 2021, Amazon raked in a Digital Commerce 360-estimated £XX billion in total gross merchandise value, or GMV, which reflects the sale of physical goods through both first-party inventory and third-party marketplace sellers. That’s five and a half times the GMV of Walmart, which was £XX billion last year, Digital Commerce 360 estimates. The disparity grows when considering GMV from purchases through third-party sellers as Amazon pulls more than double the GMV share from outside merchants — XX% to Walmart’s XX% in 2021.

That translated into £XX billion in third-party gross sales in 2021 for Amazon — more than 13 times Walmart’s £XX billion. Amazon is also the favorite platform among Top 1000 retailers selling on marketplaces. More than half — XX% — of ranked merchants offer their products on Amazon.

That’s nearly four and a half times the share of Top 1000 retailers selling on Walmart Marketplace at XX%. EBay’s share of Top 1000 marketplace sellers — XX% — edges out Walmart but is still far off from Amazon. The gap between Amazon and Walmart adoption rates widen when considering merchant type.

Amazon is far and away the preferred marketplace for consumer brand manufacturers with XX% of Top 1000 brands listing there.

Just XX% of brands sell on Walmart Marketplace.

References

  1. ^ extending the invite to Canadian retailers (corporate.walmart.com)
  2. ^ opened up its platform to foreign retailers (www.bloomberg.com)
  3. ^ recruiting U.K. sellers (corporate.walmart.com)
  4. ^ Darren Carithers (www.linkedin.com)
  5. ^ Top 100 Global Online Marketplaces (www.digitalcommerce360.com)
  6. ^ Top 1000 (www.digitalcommerce360.com)
  7. ^ Bizrate Insights (bizrateinsights.com)
  8. ^ John David Rainey (corporate.walmart.com)