Walmart.com, the largest retailer in America, has seen a significant increase in Chinese sellers on its marketplace in recent months. Starting in 2021, Walmart opened its marketplace to international sellers due to pressure from competitors like Amazon, Temu, and Shein. This shift has led to a surge in new Chinese sellers, with data showing that in April 2024, 73.8% of new sellers on Walmart Marketplace were from China. Walmart has been actively engaging with Chinese sellers, even hosting a seller summit in Shenzhen and providing resources in Chinese to help onboard new sellers.
The rise of Chinese sellers on Walmart Marketplace mirrors a similar trend on Amazon, where third-party vendors largely based in China are expected to surpass 66.8% of online sales this year. In contrast, Walmart’s reliance on third-party vendors accounts for about 11.3% of its total annual online revenue. Temu, a Chinese-owned app that launched in the U.S. in 2022, has also capitalized on this trend, becoming the most downloaded app in America in 2023 with sales likely into the billions. The company has enabled Chinese vendors with merchandise in the U.S. to sell directly to American consumers, offering competition to Amazon and Walmart.
While American brands with strong name recognition may not face significant competition from smaller overseas counterparts, smaller American sellers are feeling the impact of increased competition from China. The Chinese government has announced plans to support e-commerce sellers and encourage them to expand globally. Analysts suggest that Chinese companies are looking outside the country for customers due to a softening consumer economy in China. There is a significant demand among Chinese sellers to tap into the U.S. market, prompting the government to support cross-border e-commerce efforts.
Goldman Sachs investor notes indicate that Amazon and PDD Holdings, the parent company of Temu, combined represent 31 percent of global online sales. In the U.S., Amazon and Walmart remain dominant players, with PDD Holdings worth more than $200 billion. This rapid rise has positioned PDD Holdings as a major player in the e-commerce market. The company’s success is attributed to its aggressive expansion and the popularity of Temu, which has become a significant player in the U.S. market within a short period.
The increasing presence of Chinese sellers on e-commerce platforms like Walmart Marketplace and Amazon signifies a shift in the industry towards more international sellers. While major American brands may not be directly impacted, smaller American sellers are facing increased competition from Chinese counterparts. The Chinese government’s support for cross-border e-commerce and the rise of companies like PDD Holdings highlight the changing dynamics of the global e-commerce market. As Chinese sellers continue to target overseas markets, the competition among e-commerce platforms is expected to intensify, with Amazon and Walmart remaining key players in the industry’s landscape.
