Walmart.com typically falls into the top 20 most visited sites in the US as measured by Comscore, just behind online e-commerce giant Amazon.com (AMZN). Walmart has launched initiatives to increase its traffic including cut-rate prices on e-books and popular DVDs.
Now, the largest retailer in the world will make a push into the world’s largest nation by population.
The FT reports that “The retailer already has 282 physical stores in China and 371 Seiyu stores in Japan, but has no direct online sales.” Wal-mart is close to launching e-commerce sites in several countries.
Wal-mart may not be as successful as it hopes in China. Most large retailers in the People’s Republic have been online for years. Wal-mart will have to play catch up. Retailers like Amazon have found that some of their products are “blocked.” Publisher’s rights are used as a way to keep the Kindle off the online market
But, coming from behind may not be Walmart’s biggest challenge. The way that the Chinese use the internet could be a higher hurdle. Google’s (GOOG) revenue in China last year was only $300 million. Search engine leader Baidu’s (BIDU) was only $600 million and its revenue growth rate has slowed compared to the previous five years.
It is still not clear that the Chinese are as open to e-commerce purchasing as people in Western nations are. That difference may be cultural. The Chinese may be more likely to want to see items before they but them. Or, it may be that the internet in China is not “private” the way it is in the US. The central government obviously monitors the internet and monitors it carefully. Better to go to a store to make a purchase than to let the government keep track of online habits.
Walmart may not do well in China and it could have nothing to do with the quality of its website or the products that it offers.
Douglas A. McIntyre
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