Walmart is upping its e-commerce game again, adding Shopify to Marketplace

Walmart Inc. WMT has long been focused on upping its e-commerce game to evolve with the changing consumer environment and remain consistent in the face of competition from e-commerce king Amazon AMZN. The company benefits from ongoing e-commerce ventures such as alliances, buyouts and improved delivery services. The multi-channel retailer has added a feather to its cap by joining forces with Shopify Inc. SHOP, an all-in-one trading platform.

With this partnership, the world’s largest retailer can open its Walmart marketplace to Shopify sellers. Certainly, the company’s efforts to strengthen its e-commerce operations are paying off even more in the current pandemic situation, in which customers prefer to stay at home and shop online. We note that Walmart’s U.S. e-commerce sales grew 74% in the first quarter of fiscal 2021, with market growth outpacing the overall business despite solid first-party sales.

That said, we believe a deal with Shopify is likely to be viewed as appropriate and beneficial to both companies, especially at this time when the customer shift to online shopping has accelerated.

Shopify Sellers on Walmart Marketplace

With the inclusion of Shopify, Walmart intends to strengthen its market for U.S.-based small and medium-sized businesses with complementary offers. Shopify has a solid portfolio of third-party sellers, who in turn seek growth through trusted sales channels. Certainly, Walmart is a solid platform for Shopify sellers who can easily list their products on Walmart.com, thus expanding their assortment for customers.

Walmart, which will begin integrating new sellers, currently anticipates adding 1,200 Shopify sellers to its marketplace this year. In addition to strengthening Walmart’s business with improved assortments that are likely to attract more customers, the deal will also enable Shopify to expand its sales network.

Walmart’s e-commerce efforts are noteworthy

Walmart has left no stone unturned to grow its e-commerce business. Company agreements with Green Dot and Microsoft MSFT; and buyouts of ShoeBuy, Moosejaw, Bonobos and ModCloth, among others, underscore its intention to build an impressive portfolio of digital brands. Moreover, the 77% stake buyout in Flipkart boosted e-commerce sales. Additionally, Walmart is making aggressive efforts to expand in the booming online grocery space, which has long been a major influence on e-commerce sales.

Thanks to such efforts, U.S. e-commerce sales saw sharp growth in the first quarter thanks to the strengthening of grocery pickup and delivery, walmart.com and the marketplace. Due to the rise in stay-at-home trends, the company has seen an increasing shift to online shopping.

These ventures are likely to further strengthen the Zacks Rank #3 (Hold) company’s online business. Walmart shares are up 8.5% over the past year, almost in line with the industry’s performance. You can see see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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