Walmart Inc. has partnered with e-commerce giant Shopify Inc. to expand its third-party marketplace site and grab more of the pandemic-fueled surge in online shopping.
The world’s largest retailer aims to add 1,200 Shopify sellers this year, Walmart executive Jeff Clementz said in an interview. The company’s marketplace site, which already offers more than 75 million products, grew at a faster pace than Walmart’s overall web business in the first quarter, and third-party sales are typically more profitable as the sellers pay a fee to list items and often shoulder the delivery costs.
The collaboration is Walmart’s latest attempt to expand the scale and profitability of its US$21.5 billion U.S. e-commerce business, which is gaining ground on market leader Amazon.com Inc. but continues to lose money. In recent years, Walmart has rolled out a fulfillment service for third-party sellers, allowed customers to return marketplace items in its physical stores and jettisoned millions of third-party items that didn’t meet quality standards.
“There are many Shopify sellers who were already on Walmart.com, but we have not penetrated their base to the extent possible,” said Clementz, who is vice president of Walmart Marketplace. “There’s a tremendous opportunity.”
For Shopify, the deal — expected to be announced as early as Monday — provides its network of millions of merchants access to Walmart’s customers, and follows a May linkup with Facebook Inc. that allowed retailers to import Shopify product catalogs to the social-media giant’s new Shops service.
“Few companies in the world match the sheer size and scale of Walmart,” said Satish Kanwar, Shopify’s vice president of product. The deal opens the door for small and medium-sized businesses “to access the 120 million customers who visit Walmart.com every month.”
Founded in 2006, Shopify has become the platform of choice for businesses large and small that are looking to get online cheaply and quickly. Monthly fees start at just US$29, which buys a virtual shop and everything that’s needed to run it, including tools to manage payments, inventory and shipping.
The Ottawa-based company claimed the second-largest share of online retail sales in the U.S. last year, and its meteoric growth has made a billionaire out of German-born founder and Chief Executive Officer Tobi Lutke.