While WalMart in the U.S. is moving full-steam ahead both online and in-store, internationally the company is seeing slower growth in several key markets.
Doug McMillon, the company’s president and CEO, told analysts on an earnings call that WalMart International’s constant currency sales growth was solid in the second quarter, with Mexico and Canada delivering strong comps.
“We are also excited about the opportunities we see in China despite slower economic growth and currency pressures,” said McMillon.
With Mexico and Canada, McMillon said customers are not only purchasing more in stores but also driving sales through ecommerce and mobile.
“In China we are expanding omnichannel offerings with the new test of in-store pickup of online orders in a number of Shenzhen stores,” said McMillon. “Chinese customers increasingly value the choice of both picking up their online stores in a local store and having it shipped to their homes. And we have started integrating our digital and physical offerings for these customers.”
McMillon noted another important milestone in the quarter with the acquisition of the remaining stake of Yihaodian, its ecommerce business in China.
“We are extremely excited about the growth potential of Yihaodian and opportunity it presents over time to deliver for customers in a seamless manner,” said McMillon.
Neil Ashe, president and CEO of global ecommerce for Wal-Mart, said since WalMart purchased a 51% stake in Yihaodian in 2012, it has doubled the number of registered customers to 100 million.
“Our primary goal is to continue to accelerate Yihaodian’s core ecommerce business and maintain strong local Chinese expertise,” said Ashe. He added Wal-Mart plans to leverage its global reach and scale to benefit Yihaodian, including global sourcing.
Dave Cheesewright, president and CEO of WalMart International, China sales grew 1.2% while comp sales declined 1.4%.
“Throughout the quarter, we made significant progress in our omnichannel efforts, launching WalMart To Go in 23 stores in Shenzhen, bringing customers the convenience of ordering through the Wal-Mart app and the choice of pick up in store delivery to their home,” said Cheesewright.
WalMart is also testing ways to bring added payment methods and the convenience of mobile payment to customers in the stores.
In the second quarter, Yihaodian’s double-digit sales growth was driven by continued improvement in conversion rates, with mobile contributing to 55% of orders.
During the second quarter, WalMart’s global ecommerce sales grew approximately 16% on a consistent currency basis led by solid results in both of its U.S. businesses and WalMart and Sam’s Club. Because of the softness in international markets, Ashe said WalMart is resetting its full-year global ecommerce forecast from the mid-20s to mid-to-high teens.
The company is also seeing accelerating growth in Mexico and Canada, offsetting challenges in the United Kingdom, Brazil and China. Cheesewright said UK sales declined 4.1% while Canada sales grew 5.4%. Overall global comps increased 3.9% despite global headwinds, driven by strong performance in food, health and wellness, home and toys.
For Wal-Mart Brazil, net sales declined 9% and comp sales were down 1%, while ecommerce continued to perform well. “[Ecommerce] sales grew by double digits and outpaced the Brazilian ecommerce market,” said Cheesewright.