As a retail industry analyst and consultant, I‘ve had a front-row seat to Walmart‘s international expansion over the past three decades. From its first steps into Mexico and Canada in the early 1990s to its current position as the world‘s largest retailer with over 10,500 stores across 24 countries, Walmart‘s global journey has been marked by bold bets, big successes, painful failures and continuous learning and adaptation.
In this in-depth article, I‘ll share my perspective on how Walmart has approached international growth, how its global strategy has evolved in response to changing market conditions and competition, and what the future may hold as the retail giant continues to navigate an increasingly complex and dynamic global landscape. We‘ll dive into the data, dissect the deals, and draw lessons that apply not just to Walmart, but to any retailer with international ambitions.
The Rise of Walmart International
First, let‘s set the stage with some key facts and figures on Walmart‘s international business:
- Walmart‘s first international store opened in Mexico City in 1991 – a Sam‘s Club.
- In 1994, Walmart acquired 122 Woolco stores in Canada, marking its first major international acquisition.
- Walmart International generated $120.8 billion in revenue in fiscal 2021, accounting for 22% of Walmart Inc.‘s total sales.
- Walmart is the largest private employer in Mexico and Central America with over 200,000 associates.
- As of January 2021, Walmart operated 6,101 retail units outside the U.S.:
- 3,189 in Mexico and Central America
- 1,496 in Canada
- 424 in China
- 373 in Chile
- 293 in the United Kingdom
- 90 in India
To put these numbers in context, let‘s compare Walmart International‘s footprint and performance to some of its largest global competitors:
| Retailer | FY 2020 International Sales | % of Total Revenue | # of Countries |
|---|---|---|---|
| Walmart | $120.1 billion | 24% | 26 |
| Amazon | $74.7 billion | 27% | 17 |
| Carrefour | €52.0 billion | 53% | 30 |
| Tesco | £17.1 billion | 22% | 7 |
| Lidl | €87.0 billion | 64% | 30 |
Sources: Company reports and presentations
As this data shows, Walmart is the world‘s largest retailer, but its international operations are less geographically diversified than European competitors like Carrefour and Lidl. Walmart also derives a smaller portion of its sales from outside its home market compared to these retailers, although it has a larger international business in absolute dollar terms.
Amazon, Walmart‘s chief rival, currently gets over a quarter of its revenue from international markets. But the e-commerce giant is rapidly expanding its global presence through both organic growth and acquisitions, such as its $16 billion purchase of Middle Eastern online retailer Souq in 2017.
The "Glocal" Approach
One of the defining features of Walmart‘s international strategy has been its ability to strike a balance between leveraging its core strengths and adapting to local market conditions. I call this the "glocal" approach – thinking globally, but acting locally.
On the global side, Walmart brings to each market its world-class capabilities in areas like supply chain management, information technology, category management, and data analytics. It leverages its massive scale to negotiate better terms with suppliers, optimize inventory levels, and drive operational efficiencies. And it transplants successful innovations from one market to another, such as its digital shopping assistant developed in China.
At the same time, Walmart has shown a willingness to flex and adapt its model to the unique needs and nuances of each country. Some examples:
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In Mexico, Walmart launched Bodega Aurrera in 2003, a soft discount chain targeted at lower-income consumers. Bodega stores feature cheaper, more basic assortments and are located closer to where customers live vs. the big-box suburban format common in the U.S.
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In Japan, Walmart‘s Seiyu stores cater to local tastes with an extensive selection of fresh foods, ready-to-eat meals, and local specialties. Stores feature sushi counters, noodle bars, and even Sake tasting stations.
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In India, Walmart entered the market in 2007 with a cash-and-carry wholesale format to comply with foreign direct investment regulations. It wasn‘t until 2018 that Walmart made its biggest move in India, acquiring leading e-commerce player Flipkart for $16 billion.
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In China, Walmart has built a strong alliance with JD.com, the country‘s second-largest e-commerce company. Through this partnership, Chinese customers can buy from Walmart on the JD platform, while more than 400 Walmart stores double as JD pickup and delivery hubs.
This localization extends to Walmart‘s marketing and branding as well. In Central America, Walmart operates stores under local banners like Paiz, La Despensa, and MaxiPali that are already familiar to shoppers. And it adapts its taglines to fit the local language and context – "Preço baixo todo dia" in Brazil or "Save money. Live better." in China.
The key point is that there is no one-size-fits-all "Walmart Way" that gets pushed out to international markets. While the company certainly seeks to scale global best practices, it has learned over time that sustaining success abroad requires a high degree of local relevance and responsiveness. As former Walmart International CEO Doug McMillon put it: "We strive to be the most local of global companies."
Learning from Failures
Of course, navigating the complexities of different countries and cultures isn‘t easy, even for a retail powerhouse like Walmart. The company‘s international track record includes several high-profile stumbles and retreats over the years:
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In Germany, Walmart struggled to gain traction against entrenched discounters Aldi and Lidl. Differences in shopping habits, labor regulations, and competitive dynamics eventually led Walmart to sell its 85 German stores to Metro in 2006, taking a $1 billion loss.
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In South Korea, Walmart pulled out in 2006 after failing to adapt its big-box model and merchandise mix to local preferences. Home-grown rivals like E-Mart and Lotte proved too nimble and culturally attuned for Walmart to beat.
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In Japan, Walmart first took a 37% stake in Seiyu in 2002, gradually increasing ownership to 100% by 2008. But despite heavy investments in store upgrades and new formats, Seiyu remained unprofitable amid Japan‘s stagnant economy and brutal retail competition. In 2020, Walmart sold off 85% of the business to KKR and Rakuten.
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In Brazil, Walmart faced operational challenges and a deep recession after becoming the country‘s third-largest retailer through a series of acquisitions in the 2000s. In 2018, Walmart sold an 80% stake in its Brazilian unit to private equity firm Advent International.
What can we learn from these failures? A few key themes emerge:
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Even the most successful retailers can struggle to export their model to very different cultural and economic contexts. What works in the U.S. or U.K. may not translate to Germany, Japan or Brazil.
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Entrenched local competitors with a deeper understanding of the market can be very hard to dislodge, even with Walmart‘s scale and resources. Walmart may be the "EDLP" king at home, but Aldi and Lidl wrote that playbook in Germany.
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Partnerships and acquisitions can accelerate entry into a new market, but they also carry risks of cultural clash, integration challenges, and dilution of the core business model. Walmart has had to write off billions in losses on ill-fated deals.
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In some cases, the best choice is to cut losses and redeploy assets to higher-potential markets, rather than doubling down on a flawed strategy. Walmart‘s exits from Germany and South Korea reflect this "fail fast" mentality.
Looking Ahead
So where does Walmart International go from here? As I see it, the company‘s global growth strategy will be shaped by a few key priorities and trends in the years ahead:
1. Doubling down on multichannel retail
The lines between physical and digital retail are blurring rapidly, and the future belongs to retailers who can offer a seamless, tech-enabled shopping experience across channels. Walmart has made huge strides on this front in recent years, investing billions to build out its e-commerce capabilities, acquire digital native brands, and roll out innovations like in-store pickup and delivery.
Abroad, Walmart is extending this multichannel focus through key partnerships like JD.com in China and Rakuten in Japan, as well as the Flipkart acquisition in India. Expect to see more tie-ups that give Walmart a bigger digital footprint in priority markets. At the same time, Walmart will likely pare back its exposure in countries where it lacks the scale and local leadership to win in an omnichannel world.
2. Expanding the ecosystem
Beyond retail, Walmart is starting to build a broader ecosystem of products and services to drive customer loyalty and lifetime value. A prime example is the launch of Walmart+ in the U.S., a membership program that offers benefits like same-day delivery, fuel discounts and mobile scan-and-go shopping.
Internationally, Walmart has begun to plant similar ecosystem seeds. In Mexico, Walmart‘s Cashi digital wallet has over 1.4 million users who can send money, pay bills, and deposit cash at any Walmart store. In Canada, Walmart has partnered with Instacart to offer same-day delivery of not just groceries, but office supplies, clothing, electronics and more.
Developing these ecosystem plays will require striking the right balance of organic innovation and external partnerships in each market. But the potential prize is huge: a stickier, higher-frequency relationship with customers that goes beyond the weekly stock-up trip.
3. Innovating the last mile
With the surge in e-commerce adoption during COVID-19, the battleground in retail has increasingly shifted to the last mile. Major e-tailers are pouring billions into building faster, cheaper, more convenient delivery networks to get packages to the doorstep in hours, not days.
Walmart‘s store footprint gives it a potential advantage in this race. Why build expensive fulfillment centers when you already have thousands of stores located close to customers? In the U.S., Walmart is leveraging its supercenter network as a "last-mile delivery ecosystem," stocking high-velocity items and using stores as pickup and delivery hubs.
This model could be a differentiator for Walmart in international markets as well, especially those with high population density and strong demand for online grocery. Walmart is already piloting in-store fulfillment and delivery from its Superama stores in Mexico City. Innovations like dynamic routing, autonomous vehicles and smart packaging could make these last-mile networks even more efficient over time.
4. Leading on social and environmental impact
Finally, I believe Walmart has an opportunity – and a responsibility – to be a leader on the global stage when it comes to social and environmental challenges. As the world‘s largest company and employer, Walmart‘s footprint is massive, giving it the scale to drive meaningful change on issues like sustainability, supplier diversity, responsible sourcing and employee well-being.
Some recent examples of Walmart‘s global impact efforts:
- Partnering with the Walmart Foundation to provide over $100 million in COVID-19 relief and response around the world.
- Sourcing more from women-owned businesses, with over $11 billion in purchases outside the U.S. in 2020.
- Launching a Circular Connector recycling program in Chile to help suppliers reduce waste.
- Setting science-based targets to achieve zero emissions across Walmart‘s global operations by 2040.
Of course, Walmart still faces its share of criticism on labor practices, environmental impact and market dominance. Maintaining trust with all stakeholders – customers, associates, suppliers, shareholders and communities – will be an ongoing challenge and priority.
But in my view, Walmart‘s international scale is too big to ignore when it comes to driving progress on the world‘s toughest challenges. By leading on these fronts and tying them to the core business strategy, Walmart has the chance to be not just a successful global retailer, but a force for good in the 21st century.
Conclusion
Walmart‘s international expansion over the past 30 years has been defined by big bets, successful adaptations, hard-won failures, and a continuous evolution in response to new market realities.
As Walmart looks to the next 30 years, the road ahead will be paved with both perils and possibilities. Shifting consumer habits, technological disruption, geopolitical tensions, and the continued rise of e-commerce will pose challenges to Walmart‘s traditional model abroad. At the same time, the company‘s unrivaled scale, innovation capabilities, and willingness to partner for the long term should position it to thrive in the dynamic global retail landscape.
Ultimately, winning internationally in the 21st century will require not just being the biggest or most efficient retailer, but being the most customer-centric, digitally enabled, and locally relevant one. By pulling these levers simultaneously across a portfolio of priority markets, Walmart has the potential for massive global growth that benefits shareholders, stakeholders, and society at large. As an industry watcher and avid shopper, I‘ll be following this journey with great interest in the years to come.
