Walmart is rolling out its grocery delivery subscription to over 1,600 stores this year:
, but it's now incubating three new brands itself, and if they succeed Walmart could pivot to just creating its own digital brands. Developing its own brands could prove beneficial since it may cost less capital, and it can sell the products on a number of digital channels, including Walmart.com. In contrast, putting acquired brands on Walmart.com could negativelyit's rolling out its grocery delivery subscription to over 1,600 stores this year.
These moves come as Walmart's e-commerce business faces stagnating growth and questions about its expenses, and they suggest Walmart may still be willing to spend to grow its business. Walmart's US e-commerce businesssolid annual growth of 37% in its fiscal Q2 2020 , but this is a deceleration from the 40% annual growth it turned a year prior and marks the fifth consecutive quarter it's grown 37-43% year-over-year .
While this is still strong growth, it might mean Walmart is having trouble improving on its previous performances. Additionally, its e-commerce business isset to lose $1 billion this year despite bringing in between $21 billion and $22 billion, and it may be facing pressure to cut costs. But launching an unlimited delivery service nationwide, which is likely costly to operate, and investing in creating new brands may mean Walmart is still willing to spend to boost its performance.
If Walmart wants to compete with Amazon, it'll have to continue to make significant investments that bring its offerings closer to those of the e-commerce titan. Walmart didn't necessarily have to create a competitor for Prime, but it didto offer speedy delivery for a variety of products on a wide scale, and Delivery Unlimited helps it do that. It will need to make more investments that help it catch Amazon if it wants to challenge its top position in US e-commerce.
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