| June 12
June 12 Fernando Madeira comes to his new job as
head of online business for Wal-Mart Stores Inc with a
reputation as an e-commerce whiz, having engineered a surge in
the retailer's online sales in Latin America.
In his enlarged role, the Brazilian company veteran will
face a more formidable challenge - taking on Amazon.com Inc
in the far-more developed U.S. online marketplace,
where the world's biggest retailer is yet to make its mark.
Wal-Mart announced Madeira's promotion on Monday, two days
after unveiling plans to integrate e-commerce with its sprawling
network of brick-and-mortar stores.
Madeira's job, from next week, is to make that strategy
The goal of generating a bigger chunk of revenue from
e-commerce has assumed more urgency for Wal-Mart as it struggles
to revive sales in the United States.
The company's U.S. same-store sales have fallen for five
quarters in a row.
Under Madeira's watch, Wal-Mart increased its online sales
in Brazil at twice the rate of the growth in the overall online
market, according to an internal memo obtained by Reuters.
Reasons for the surge included a sharp increase in the
number of products available and improved order fulfillment -
the process that starts with ordering and ends with delivery.
In the United States, Madeira will have to do more than
mimic Amazon as Wal-Mart plays catch-up.
Wal-Mart reported online sales of $10 billion in 2013 -
less than 3 percent of overall sales - compared with Amazon's
online sales of $67.85 billion.
Wal-Mart says it expects online sales of $13 billion in 2014
- a growth of 30 percent. Analysts generally expect Amazon's
online sales to grow more slowly than that.
Amazon controlled 25.8 percent of the online market share in
the United States in 2013 while Wal-Mart had 3.4 percent,
according to e-commerce tracker Internet Retailer.
CROWD SOURCING AND DRONES
Still, Wal-Mart has some advantages, including its size and
widespread physical presence.
Wal-Mart is already experimenting with using trucks as
pickup points for online orders, and is testing a scheme to
allow customers to order online and pay with cash at its stores.
The company is also exploring a way to crowd-source
deliveries, seeking out customers at its stores to make
deliveries to online buyers in return for discounts.
Amazon, with no physical stores, has none of those services.
Some of these trials may not pan out.
But they do show the priority that Wal-Mart Chief Executive
Doug McMillon is giving to e-commerce.
In his role as Sao Paulo-based CEO of Wal-Mart's e-commerce
business in Latin America, Madeira went up against established
regional giants such as Brazil's MercadoLibre Inc and
B2W Companhia Digital.
Walmart.com Brazil grew into one of the largest e-commerce
companies in the country after Madeira took over in 2012.
Traffic surged four-fold as the online sales force tripled
to 1,000 in 15 months and consumers took to a revamped website.
Madeira, whom Wal-Mart declined to make available for an
interview, will continue to oversee Latin America from San
Bruno, California, where Wal-Mart has its online headquarters.
Amazon is not sitting still, however.
The online retailer has started grocery deliveries in
Seattle and Los Angeles and is firming up plans to use drones to
deliver packages faster to customers. It also plans to launch a
marketplace for local services.
And both Wal-Mart and Amazon face a formidable competitor in
Chinese internet giant Alibaba Group Holding Ltd IPO-ALIB.N,
which launched its first online shopping portal in the United
States on Wednesday.
"Wal-Mart seems to be embracing changes faster than in the
past and faster than might be expected for a retailer as big as
Wal-Mart," Stifel Nicolaus analyst David Schick said in a note.
"(But) sheer size and inertia at Wal-Mart means it will take
a lot for talk of change to become return on invested capital."
(Editing by Feroze Jamal and Ted Kerr)