Walmart Mexico, known as Walmex $WALMEX* (-0,35 %) , is embarking on an ambitious e-commerce strategy aimed at doubling its sales within the next decade. Ignacio Caride, who recently took the helm as CEO after a successful tenure at Mercado Libre $MELI (-0,23 %) , emphasizes that Walmex is evolving beyond traditional retail. His vision includes creating a seamless integration of physical stores and online shopping, while also expanding into healthcare and financial services.

The e-commerce landscape in Mexico presents a significant opportunity, with the sector growing rapidly. In 2023, it surged by 25%, reaching around 658 billion pesos (approximately $34 billion), but still holds a modest penetration rate of just 13%. This is considerably lower than Brazil's, indicating ample room for growth. Currently, Amazon and Mercado Libre dominate the market with respective shares of 39% and 18%, while Walmart lags behind at 11%.

To compete effectively, Caride acknowledges the need to modernize Walmex's legacy IT systems, which were designed for a retail-centric approach. He aims to enhance the company's digital capabilities to better serve customers and improve cross-selling opportunities. This includes initiatives like collecting customer mobile numbers at checkout to foster a rewards system, which will help Walmart understand shopping behaviors better.

Despite facing challenges, such as increasing competition from local players like Chedraui and the need to adapt to changing consumer preferences, Walmex reported a solid revenue growth of 6.4% in the second quarter of 2024. The company is also investing heavily in technology and new store openings, with plans to launch over 1,000 stores in the next five years.

Caride's approach reflects a broader trend in the retail industry, where traditional companies are striving to integrate their online and offline operations. This transformation is crucial as the cost of doing business rises, particularly in Mexico, where wage increases are significant.

As Walmex navigates this transition, it will be interesting to see how effectively it can leverage its extensive physical presence and customer base to enhance its e-commerce offerings. What are your thoughts on Walmart Mexico's strategy and the potential for growth in the Mexican e-commerce market?