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Walmart Shutters Underwhelming Online Business in Brazil

Walmart Brasil is shutting down its e-commerce business, opting instead to focus on improving its brick-and-mortar operations in the region.

The company made its foray into Brazil’s e-commerce marketplace in 2011, and while Walmart is the No. 2 retailer in the U.S., it never truly managed to find its footing in Latin America’s largest retail market.

In 2017, Walmart stopped selling directly to consumers, leaving only its third-party marketplace open to Brazil’s online shoppers. Though Walmart hasn’t disclosed how much online contributed to overall sales in Brazil, a mid-2018 buyout of the company’s online operations by Advent International suggested that the platform was facing real challenges, Reuters reported. The private equity firm acquired 80 percent of Walmart Brasil’s e-commerce business, enacting a broad revamp which ultimately failed to deliver results.

Walmart’s online business has also faced ample competition from local e-tailers like B2W, Via Varejo and Magazine Luiza SA. The long-awaited (and now-imminent) opening of Amazon’s Brazil fulfillment center could also be a factor in Walmart’s decision to shutter online operations.

The company has laid of 70 of the 90 employees currently managing the platform, and is retaining 20 workers to deal with ongoing orders, according to Reuters.

Separately, Walmart announced that it would be converting 10 of its under-performing stores into Maxxi Atacado wholesale markets by the end of 2020. The first wholesale market store was opened earlier this month in the city of Diadema, near Sao Paulo. Ten more Walmart locations will be converted into Sam’s Club stores, the company said in a statement. Wholesalers have become popular in Brazil, Reuters reported, since the country began emerging from a deep recession in 2016.

Brazil’s e-commerce business isn’t the only lackluster performer that the company is looking to ditch.

In early May, Walmart attempted to leave the U.K. market by selling its Asda chain of grocery stores to Sainsbury’s, the country’s third largest grocery chain. The sale was blocked by the U.K.’s chief competition regulator, The Competition and Markets Authority (CMA). For now, Asda will remain a part of Walmart’s portfolio, even as it attempts to capitalize on other international opportunities.

Walmart International CEO Judith McKenna said in a statement that the company is considering an IPO for the Asda business.