Walmart2World and the convergence of retail and finance

Apr 26, 2018

GDR Innovation Researcher Charlie Lloyd explores how Walmart’s latest initiative mirrors the convergence of retail and finance in China


This month, US grocery giant Walmart announced the launch of a new programme, Walmart2World. The scheme is an expansion of the Walmart2Walmart initiative that, for the past four years, has allowed unbanked customers to transfer money between Walmart locations.

Walmart2World constitutes a significant global expansion of its predecessor. By partnering with MoneyGram, Walmart will allow its customers to transfer funds to more than 200 countries in the world. Funds can be sent from Walmart to any Moneygram location across the world, or to international bank accounts or mobile wallets.

The advantages that make this new service preferable to existing international transfer services, according to Walmart, are cost and speed: rates are low and do not vary between destinations while transactions will hit recipients’ accounts in ten minutes, not three days, as is taken by some existing providers.

Why is Walmart doing this? Well, in 2016 alone, US immigrants sent $69bn in remittances abroad to their families; and so there is a considerable amount of money to be made. Moreover, the total earnings Walmart stands to make far exceeds whatever they take in Walmart2World fees. If a customer makes regular visits to Walmart to send money back to their family, there’s a fairly good chance that Walmart is where they’ll pick up their groceries too. As Kirsty Ward, VP of Walmart Services, told CNBC: “We would love for customers to choose who they shop with based on how we can save them money…If they choose to spend [their savings] in Walmart, that’s fantastic.”

Walmart2World could prove to be a substantially lucrative new revenue stream for the business. But it becomes a lot more interesting, and makes a lot more sense, when looked at in parallel to the convergence of retail and finance in China.


The Chinese example

China is undoubtedly the best place to look to for a glimpse of the retail future in the West. As Andy Dunn, founder and CEO of Bonobos has pointed out, Western retailers are having to shift from a 20th Century proposition that was built around the automobile to a 21st Century one built around the smartphone. That’s a colossal shift, with ramifications across retailers’ entire business models. What’s different about China is that its retail industry is maturing at a time when smartphones are already ubiquitous. While Western retailers spend billions of dollars renovating the monolithic structures of their retail industries, China has been able to build quickly from the ground up.

As China’s tech industry boomed before its physical retail market, it’s not that surprising that it is two tech companies battling it out to dominate the country’s burgeoning supermarket industry; Alibaba, through its Hema Market, and Tencent, through various investments, partnerships and acquisitions including Carrefour, Yonghui and 7Fresh with

Both of these tech behemoths were founded as online platforms within months of each other in 1998/99, Alibaba in ecommerce and Tencent in social networking. Alibaba swiftly moved into payments, followed eventually by its rival. As companies building their empires up from the ground with very few serious competitors in either retail or finance, owning not only what their customers buy but also how they pay for it was a no-brainer. It means both operate as a full stack, and so the quantity of data available to them about their customers is enormous. It’s essentially like Tesco or Walmart owning the electronic payment data of its customers; not only when those customers shop with them but when they shop anywhere.

Fast forward to 2018. In January, MoneyGram, the company with whom Walmart has partnered on Walmart2World, was the subject of a takeover bid by Alibaba, but the deal was blocked by a US government nervous about the growing commercial links between the two countries.

No one will be more relieved with the decision than Walmart, which seems to have acted quickly to take advantage of the situation. They have enough on their plate from Amazon, who for their part are in talks with JPMorgan to offer customers Amazon bank accounts.

With the pace being set by Chinese tech giants looking to expand their financial businesses abroad, we can expect the major Western players to announce more ventures that will help them to compete.

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