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Walmart expected to record US$1b loss in e-commerce business

Supermarket giant Walmart’s effort to compete with Amazon by ramping up its e-commerce business through acquisition and investment is dragging the company’s profitability.

Walmart is set to record a roughly US$1 billion loss in revenue for its US e-commerce division of between $21 billion and $22 billion this year, according to a Vox report, which has been widely cited in US media.

Three of Walmart’s digital brand acquisitions, Bonobos, ModCloth and Eloquii, were said to have remained unprofitable.

The retailer’s CEO Doug McMillion and other top executives were said to be pressuring Marc Lore, current Walmart e-commerce chief and founder, to cut down on losses. Walmart bought in 2016 for more than $3 billion.

According to the report, Walmart might sell its women’s apparel brand ModCloth later this year for less than the cost to purchase the company.

Walmart did not make any comment on the report.

Meanwhile, the retail giant announced it plans to build or upgrade more than 10 distribution centres over the next 10 to 20 years.

Ryan McDaniel, senior vice president of supply chain for Walmart China, said Monday Walmart plans to increase its investment in its supply-chain logistics.

In addition to building the first customised perishable food distribution centre, the South China Fresh Food Distribution Centre, the company plans to increase investment in its supply-chain logistics in China by ¥8 billion or about $1.2 billion.

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