HomeBusiness NewsDespite A Decade of Struggle, Walmart Inc. (NYSE: WMT) Doubles Hard In...

Despite A Decade of Struggle, Walmart Inc. (NYSE: WMT) Doubles Hard In Africa


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The world’s largest retailer, Walmart Inc (NYSE: WMT) gambled on Africa in 2011, purchasing a controlling share in South African retailer Massmart in what many investors considered as a step toward dominating the continent’s massive undeveloped market. It did not go as planned. Shares of Walmart (WMT) increase over 1.23% to trade at $135.74 in early trading session on Friday.

More than a decade later, Massmart’s financial sheet is saddled with debt, its books are riddled with losses, and it is drowning in commercial leasing commitments.

Walmart’s African odyssey over the last decade has been a series of blunders, from its late entry into e-commerce to an ill-fated effort into fresh goods, exacerbated by economic headwinds and the COVID-19 outbreak.

Instead of abandoning its African problem child, as it did after setbacks in the United Kingdom and Germany, Walmart is doubling down with a plan outlined in August to assume complete control of it.

According to nine analysts, investors, and people with direct knowledge of Walmart’s plans, the aim is to first create Massmart into a force capable of displacing its brick and mortar competitors, and then to win an impending struggle against Amazon for the future of African e-commerce.

“Walmart intends to infuse its whole e-commerce enterprise and experience into Massmart,” a person close to the deal said. “A significant investment is needed to keep it relevant.”

According to Reuters, delisting will allow Walmart to make direct capital injections and absorb additional losses without being pressured by impatient Massmart shareholders who have not paid dividends in three years. The prize: the world’s final untouched retail market, with a billion people and rising household expenditure.

Walmart International President Judith McKenna said in an email answer this month to queries that they continued to see opportunities in Massmart and the impact the business can have, giving people across the area with more access to goods and services they desire.

Meanwhile, competitors in South Africa have stepped up their game, according to Jean Pierre Verster of Protea Capital Management, which oversees funds with exposure to Massmart shares.

He explained that Walmart (WMT) realized that other shops in South Africa, such as Shoprite, Pick n Pay, and so on, are extremely clever businesses, and they can’t simply push them over.