US retailer Walmart is teaming up with Canadian e-commerce platform operator Shopify Inc to bolster its online shopping presence. Walmart plans to utilize Shopify's extensive online retailer-centric suite of service and merchant network to accelerate its efforts of tapping into the surge in the demand for online shopping amid the coronavirus pandemic.
Through the partnership, Walmart expects to add more than 1,200 Shopify sellers to its own online marketplace platform. By teaming up with Shopify, Walmart is hoping to take on its much bigger online rivals, eBay and Amazon. According to Walmart, both companies will mainly be targeting small to medium-sized US businesses with the integration of their platforms.
Shopify mentioned in a statement that merchants using its platform should soon be able to connect their accounts with their Walmart seller accounts. This means that merchants can opt to list their products on Walmart's marketplace once they link their accounts. Walmart claims that its platform received around 120 million visits from US consumers each month.
Walmart currently operates the country's third-largest online marketplace, right behind Amazon and eBay. Amazon leads the pack with an estimated 2.01 billion visits to its platform each month.
Analysts at Eight Capital have noted that the partnership between Walmart and Shopify is a long-awaited one. Given Shopify's existing channel partnership with eBay and Amazon, it is only natural for Walmart to form a partnership with the platform operator as well.
Shopify's share prices surged by more than 7 percent following the announcement of partnership on Monday. Since the start of the year, the company's share prices have more than doubled, briefly making it Canada's most valuable company back in May. Apart from partnering with Walmart, Shopify is also ironing out similar deals with other US tech firms, including Facebook and Pinterest.
During the peak of the pandemic in the US, online retail sales have ballooned to unprecedented numbers as consumers turn to online shopping amid the lockdowns and shelter-in-place orders. Various retailers, from mom and pop restaurants to large pizza chains, have looked to the internet to ensure that their businesses stay afloat during the global health and economic crisis.
To take advantage of the pandemic-driven surge, Walmart has made significant adjustments to its business, adapting e-commerce solutions to its massive network of brick-and-mortar stores. Last month, the company reported a 47 percent increase in e-commerce sales for its latest quarter. The company also announced that it would be halting operations to some of its subsidiaries to save on cost and to better focus on its more profitable ventures.
