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July 12, 2018

Walmex's new e-commerce VP eyes groceries to propel online business

Walmex's new e-commerce VP eyes groceries to propel online business
Walmex's new e-commerce VP eyes groceries to propel online business

By Daina Beth Solomon

MEXICO CITY (Reuters) - Wal Mart de Mexico's (MX:WALMEX) new e-commerce head plans to play to its strengths in grocery deliveries to help the country's largest retailer stand apart from rivals, like Amazon.com Inc (NASDAQ:AMZN) and his former employer MercadoLibre Inc, he said in an interview Wednesday.

Ignacio Caride, who joined the company as a vice president last week, said internet food or household orders can encourage shoppers to seek non-grocery goods from the website or mobile app of Walmex, as the company is known.

"Leveraging the food and supermarket delivery part adds a very big competitive advantage," said Caride, who spent 13 years at online marketplace MercadoLibre. "It generates a shopping habit."

Online and brick-and-mortar businesses alike have been boosting e-commerce investments in Mexico, pressuring retailers to stay ahead with efficient logistics, broad inventories and fast shipping.

Just 3 percent of all retail sales in Mexico are online, according to market research firm Euromonitor International, providing growth opportunities for retailers as internet and banking access for Mexican shoppers improves.

Walmex is the biggest aiming to dominate both the online and brick-and-mortar worlds.

Mexican retailers Soriana and La Comer also offer online grocery orders but lag behind Walmex in sales, according to Euromonitor.

Walmex, with 2,390 stores across Mexico, is positioned to churn out speedy grocery deliveries, a goal shared by its parent company Walmart (NYSE:WMT) Inc in the United States, particularly faced with competition from Amazon.

The global rival to Walmart purchased upscale grocer Whole Foods last year for $14 billion and offers grocery deliveries from Instacart in as little as an hour.

For Walmart, challenging Amazon in the United States has been bumpy. Last May, it ended grocery delivery partnerships with ride-hailing services Uber Technologies Inc [UBER.UL] and Lyft, without explaining the change.

In Mexico, it partners with start-up Cornershop, a delivery service for various grocery chains.

Leveraging online sales of perishables like lettuce and frozen burgers marks a new challenge for Caride, who reports to Walmex Chief Executive Guilherme Loureiro and had helped push Mexico's growth for Argentina-based MercadoLibre, which operates across Latin America.

Despite Walmex's proximity to shoppers, Banorte analyst Valentin Mendoza said the company needs to make sure goods such as televisions and T-shirts arrive just as fast as ingredients for dinner.

"If you commit to having the groceries arrive in one day at your house, it's possible consumers will expect to also get a television in one day," he said.

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