Market Overview

Wal-Mart's Huge E-Commerce Bet On Marc Lore Starts Paying Off

Wal-Mart's Huge E-Commerce Bet On Marc Lore Starts Paying Off

Wal-Mart Stores Inc (NYSE: WMT) shook up the business world after announcing its massive acquisition of to boost its e-commerce operations last August.

The Quest For Lore

The move was more of acqui-hire to secure founder Marc Lore and bring his e-commerce expertise to the world’s largest retailer that was seeing significant risks from competitor, Inc. (NASDAQ: AMZN).

Lore initially focused on 700 zip codes where Amazon did not deliver, eventually building an e-commerce rival to Amazon that got swooped up by Wal-Mart very early into its existence.

The acquisition made Lore the highest paid executive in the U.S., higher than that of Apple Inc (NASDAQ: AAPL) CEO Tim Cook. It appears the risky move is starting to pay off, following the news that Wal-Mart’s e-commerce business grew a remarkable 63 percent in the first quarter.

The Strength Of Effective E-Commerce

Wal-Mart’s e-commerce strategy looked to expand the number of products online, leverage its huge physical warehouses and distribution centers to reach customers quickly across the country, and aggressively pursue deals for online stores, according to the New York Times.

The company now offers 50 million items online, more than a 500-percent increase from the same quarter last year. A key differentiator is Wal-Mart's online business is its free 2-day shipping that does not require a membership, unlike Amazon’s Prime model.

“I think it’s fair to say that Walmart is coming from behind online,” Neil Saunders, the managing director of the research firm GlobalData Retail, told the New York Times. “It has underperformed in that area, so what we’re seeing now is really a catch-up to where it needs to be in order to more seriously compete with the likes of Amazon.”

Related Links:

Walmart Showing Signs Of Life; Analyst Upgrades

Amazon Prime A Top Force Driving Retail Disruption


Image Credit: By MikeMozartJeepersMedia - Own work, CC BY-SA 3.0, via Wikimedia Commons


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