Walmart (WMT) Gets Instagram CEO and Founder on Board

Retail giant Wal-Mart Stores, Inc. WMT recently announced that it has appointed Kevin Systrom to its board of directors effective from Sep 26. Systrom is a software engineer and co-founder and chief executive officer CEO of photo-sharing service Instagram, which was acquired by social networking company Facebook, Inc. FB in Aug 2012.

At Instagram, Systrom was responsible for overseeing the daily operations and managing more than 200 million monthly active users accounts. At Walmart, Systrom will serve as a member of the company's Technology and eCommerce Committee and its Compensation, Nominating and Governance Committee.

Of late, Walmart's e-commerce business has been performing quite well owing to rising demand. In addition, the company has been focusing on making huge investments in the e-commerce business in order to compete with other online retailers like Amazon.com, Inc.

The company has already developed price optimization tools, improved its mobile applications and developed a new search engine available on its websites. E-commerce sales grew over 30% to more than $10 billion, including acquisitions in fiscal 2014. In the year 2013, Walmart acquired four companies — Torbit, OneOps, Tasty Labs and Inkiru — that build tools to compress data and speed up websites. Walmart's acquisition of a 51% interest in Newheight Holdings Ltd, a holding company that owns Chinese Internet retailer Yihaodian in Aug 2012, also strengthened its e-commerce presence in the Chinese market.

Walmart expects to increase its global e-commerce sales to over $13 billion in fiscal 2015, with special focus on the U.S., U.K., China and Brazil.

With changing shopping patterns, companies nowadays are driving sales by engaging with customers via sites like Instagram. Retailers like Target Corp. TGT and Nordstrom, Inc. JWN launched a new website in Aug 2014 that makes it easy for customers to buy the product posted on Instagram. Walmart's decision to bring Instagram CEO to its board also gives a clear signal that it wants to expand its technology expertise to better compete with rivals like Amazon.

Walmart currently holds a Zacks Rank #3 (Hold).