Wal-Mart Ramping Up Online Effort To Capture Global Revenue

Date : 04/06/2010 @ 9:09AM
Source : Dow Jones News
Stock : Officemax Incorporated (OMX)
Quote : 15.26  0.0 (0.00%) @ 2:05AM

Wal-Mart Ramping Up Online Effort To Capture Global Revenue

Wal Mart Stores (NYSE:WMT)
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Wal-Mart Stores Inc. (WMT) is stepping up the pace of its international e-commerce expansion, looking for staff, talking to vendors and mapping its approach to what could become one of the world's biggest Internet initiatives.

Wal-Mart wants to mix the best of what is already offered with new elements that could allow the company to sell from the U.S. into overseas markets and also use its presence in other countries to serve as springboard for online sales, said Steve Nave, general manager of Walmart.com.

"You'll see a hybrid" of what has existed for Wal-Mart and in general, Nave told Dow Jones Newswires.

The initiative will employ the reach and resources of the world's biggest retailer to see if it can capture a greater share of the billions of dollars that are being spent online annually, an amount that has been growing.

Wal-Mart already pulls in the most sales of any retailer - $405 billion last year, including about $100 billion from international operations in 14 countries. While the company doesn't disclose Internet sales, indications are the retailer has a lot of growing room. Trade publication Internet Retailer estimated that Wal-Mart's e-commerce sales in 2008, the latest projection available, were $1.74 billion. That compared with No. 1 ranked Amazon.com at $19.2 billion and No. 2 Staples Inc. (SPLS), at $7.7 billion. Other brick-and-mortar retailers like Office Depot Inc. (ODP), OfficeMax Inc. (OMX), Sears Holding Corp. (SHLD) and Best Buy Co. (BBY) outranked Wal-Mart in Web sales, with Wal-Mart only entering the list at No. 13. This was before Wal-Mart said it was making a great push to improve online sales.

A bigger international foray into the Internet "would increase global revenue by exposing Wal-Mart to a new buyer base that has financial capabilities and is interested in buying from the U.S.," said Bobby Frank, chief executive of BorderJump LLC, a provider of global e-commerce services like payment processing. "These consumers want better prices, selection and brand names they cannot find locally."

Wal-Mart during the past two weeks began advertising for a key architect of the global e-commerce effort, the program's director of market development. Qualifications for the position, which pays over $100,000 a year, suggest where Wal-Mart may be focussing its expansion. Fluency in one or more of the following languages - Mandarin, Cantonese, Japanese, Portuguese, Spanish, Hindi and French - is a plus, the job posting says.

The international e-commerce group, or global.com as Wal-Mart calls it, has as its executive vice president and chief operating officer Wan Ling Martello, formerly the chief financial officer of Walmart International. Martello was named to the new spot early this year.

Wal-Mart's Brisbane, Calif., global operation is also looking for project managers and market development directors, according to postings the retailer has placed. Brisbane is also where the company's U.S. online operation is based.

The mission of Wal-Mart's global.com initiative is to allow customers to "be able to experience the brand wherever and whenever they want," Vice Chairman Eduardo Castro-Wright said in February.

Castro-Wright said Wal-Mart would pursue e-commerce opportunities around the world, whether it be in developed markets where the retailer already has stores or as an online presence in markets where it does not.

Wal-Mart already has established online operations in countries including the U.S., the U.K., through its Asda chain, and Brazil.

Areas of opportunity include India, where Wal-Mart is building a presence through stores that are part of a joint venture. Wal-Mart also operates in China, through a joint-venture and controlled subsidiaries. In Japan, Wal-Mart operates Seiyu stores.

Aside from setting up Internet sales units for other countries, Wal-Mart is talking with some outside service providers, like BorderJump LLC, to help the retailer sell overseas from the U.S. These intermediaries would receive shipments from Wal-Mart in the U.S. and parcel them out to international destinations. This could free Wal-Mart from having to invest in an operation to handle currency exchange, customs clearance, duties and overseas deliveries.

Wal-Mart has a strong foundation from which to build, said Maggie Gilliam, president of Gilliam & Co., a retail consulting firm. "They have a very well developed system in this country. The logical next step is extending into something more global."

-By Karen Talley, Dow Jones Newswires; 212-416-2196; karen.talley@dowjones.com


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