Walmart’s E-Commerce Surge: A Catalyst for Growth
Walmart’s e-commerce sector has emerged as a significant driver of the retailer’s expansion, now accounting for approximately 20% of organizational revenue. In the past year, e-commerce sales surpassed an impressive $150 billion, buoyed by a remarkable 27% growth in the U.S. during the fourth quarter.
Online grocery sales remain a formidable force propelling this growth, achieving an uninterrupted streak of 15 consecutive quarters, each with at least 10% year-over-year expansion.
Sales conducted online, particularly through the Marketplace—a platform facilitating third-party vendors—are outpacing traditional revenue streams. In contrast, in-store comparable sales exhibited minimal fluctuations in the latter half of 2025.
Chief Financial Officer John David Rainey recently emphasized that assessing in-store sales in isolation provides only a fragment of the overall narrative.
“We operate 5,000 stores across the U.S., which serve as fulfillment and delivery nodes for our clientele,” Rainey articulated at the J.P. Morgan retail conference in New York on Wednesday.
This infrastructure empowers our e-commerce operations, enabling us to serve 95% of America within three hours.
We must consider the entire landscape and evaluate our e-commerce initiatives holistically. Currently, e-commerce constitutes roughly 20% of our business—a substantial and swiftly expanding segment.
Rainey noted that the Marketplace is also fostering new avenues for revenue generation for Walmart. John David Rainey
I am thoroughly impressed with the progress of our Marketplace operations,” he stated. “It is currently experiencing a revenue growth rate of approximately 20%.
This is gratifying not only from a revenue perspective but also in terms of the benefits provided to our customers. Categories such as home goods, hard lines, and fashion are all witnessing growth exceeding 30%.
The hardlines category encompasses items like toys, tools, small home appliances, consumer electronics, and sporting goods.
Rainey acknowledged that certain general merchandise segments have underperformed in in-store sales during recent quarters, necessitating Walmart’s diversification through Marketplace offerings.
Over the holiday season, Walmart noted a threefold increase in the number of sellers compared to the previous year, with approximately 500 million items listed on its Marketplace.
“Our aim is to continue expanding that inventory to offer a broader selection,” Rainey articulated. We have identified about 300 critical brands as ‘must-haves’ for our platform. We are currently halfway towards that goal, with around 75 of these added in the past year alone.
There’s potential for a halo effect with certain brands; as we introduce well-known products, additional complementary items often follow due to shared consumer perception.
This is a strategic priority for us, with a growing Marketplace serving as a core component of our overall strategy moving forward.
The expansion of the Marketplace is drawing increased consumer attention, which, in turn, boosts advertising revenue. Rainey noted that the diverse assortment available on the Marketplace also attracts a more affluent clientele, further enticing advertisers.
There remains substantial potential for growth in durable goods categories, as well as in apparel and baby products.
“When we consider both first-party and third-party inventory, all fashion-related sales have witnessed low double-digit growth year to date,” he remarked.
“While this may not traditionally be associated with Walmart, it underscores the quality of our product assortment. Additionally, the wider range of offers available enables us to achieve double-digit growth, a promising indicator of the transformation within our business.”
Rainey emphasized that Walmart’s U.S. e-commerce business is profitable when factoring in advertising and fulfillment revenues.
However, standalone fulfillment services have yet to reach profitability, with infrastructure costs associated with the third-party Marketplace posing challenges.
Approximately half of the goods sold via Marketplace are managed through Walmart’s fulfillment services, indicating significant room for enhancement.
“We believe that evolving the economics surrounding fulfillment will substantially improve the overall profitability of the Marketplace as we move forward,” Rainey stated.
Walmart’s advertising revenue potential within its e-commerce operations remains largely untapped. The retailer’s advertising arm charges suppliers and sellers for promotional placements on Walmart platforms, leveraging its unique shopper data. Rainey noted that artificial intelligence further augments these opportunities.
In the past year, Walmart’s global advertising business soared by 46%, reaching approximately $6.4 billion, with the U.S. segment increasing sales by 41% year-over-year, contributing to enhanced operating net income. Rainey attributed this surge to the acquisition of Vizio, along with elevated Marketplace growth.
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