Walmart Inc. expects its US ecommerce operations to become profitable this year, according to chief financial officer John David Rainey. This comes after major investments to grow its online presence, compete with Amazon, and reduce costs.

The company has expanded its third-party seller marketplace by adding more brands, wider price ranges, and new categories like pre-owned luxury accessories.

Walmart has also launched services to support digital orders fulfilled at stores, including same-day pharmacy delivery and faster delivery for customers who pay extra. Over 30% of online orders now use these expedited options.

Supply chain upgrades have lowered costs, improved shipping speeds, and boosted order volumes.

By late 2025, Walmart plans to reach 95% of US households within three hours. Ecommerce is expected to contribute around 50% of the company’s sales growth in the next five years.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Walmart’s path to e-commerce profitability overcame billion-dollar losses

Walmart’s journey to e-commerce profitability represents a remarkable turnaround from 2019, when the division was reportedly losing more than $1 billion annually on revenues between $21-22 billion 1.

This achievement follows years of heavy investments, including the $3.3 billion acquisition of Jet.com in 2016, which aimed to accelerate Walmart’s digital capabilities and talent acquisition 1.

The company’s e-commerce market share has steadily grown from 4.6% in 2018 to 6.4% in 2023, reflecting consistent progress despite Amazon’s dominant position with approximately 38-40% market share 23.

Walmart’s e-commerce sales now represent 17.8% of its total sales in 2024, up dramatically from just 4.8% in 2018, demonstrating the increasing importance of digital channels to the retailer’s overall business model 2.

The company’s recent profitable growth contrasts with its earlier strategy that prioritized market share gains over profitability, showing how Walmart has successfully transitioned from a growth-focused approach to sustainable e-commerce operations.

2️⃣ Omnichannel strategy creates fulfillment advantage against pure e-commerce competitors

Walmart’s extensive physical footprint of over 4,700 stores has transformed from a potential liability in the digital age to a strategic advantage for e-commerce fulfillment 4.

The company’s ability to use stores as fulfillment centers has created cost efficiencies that pure online retailers cannot match. Walmart can now deliver to 95% of US households in under three hours, according to the original article.

Recent Walmart developments