Wal-Mart has expanded the number of products it sells online to more than 50 million, up from 10 million during the year-ago quarter.

Wal-Mart Stores Inc. began its fiscal 2018 riding a big wave of e-commerce momentum.

Wal-Mart, No. 3 in the just-released Internet Retailer 2017 Top 500, reported Thursday that online sales in the U.S. jumped 63% year over year during its fiscal first quarter ended April 28.

Gross merchandise value—the overall value of goods sold through its websites—grew by 69% year over year. Wal-Mart did not break out specific dollar figures for e-commerce or GMV.

“The majority of this growth was organic through Walmart.com,” chief financial officer Brett Biggs told analysts on Wal-Mart’s Q1 earnings call, according to a transcript from Seeking Alpha. “This is extraordinary growth, and we’re pleased with the traction we’re generating across our e-commerce offerings.”

Our plan in e-commerce is not to buy our way to success
Doug McMillon, CEO
Wal-Mart

Not only have Wal-Mart’s online sales grown, so too has its online product assortment. McMillon told analysts the retailer now sells 50 million products online, compared with 10 million this time last year.

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Wal-Mart aggressively tried to win market share online—meaning from Amazon.com Inc. (No. 1)— during the quarter with a pair of key initiatives. The retailer now offers free two-day shipping on orders of $35 or more. Before, Wal-Mart shoppers had to be a member of its ShippingPass program to receive two-day shipping. That program charged shoppers a $49 annual membership fee for unlimited two-day shipping, similar to Amazon’s popular Prime membership program but included none of the additional benefits Prime members have such as streaming video or music.

Then in mid-April, Wal-Mart announced it will offer discounts on online orders picked up in stores through a new program called Pickup Discount. The program had 10,000 online items when it launched  April 17, and that number is expected to grow to more than 1 million by the end of June, the retailer says.

“Our stores are located within 10 miles of nearly 90% of the U.S. population, so this is convenient for many of our customers, and also saves them money when they order online and pick it up during their visit to our stores,” CEO Doug McMillon told analysts.

Analysts say they’re pleased with Wal-Mart’s e-commerce results in Q1.

“E-commerce contributed 80 basis points to the [Wal-Mart’s] U.S. comp, roughly double the 40 basis points of contribution over the past four quarters—indicating solid momentum in the company’s digital business,” writes Chuck Grom, senior retail analyst at investment research firm Gordon Haskett Research Advisors. “It is important to point out that this acceleration in not attributable to the company’s recent digital acquisitions, most notably Jet.com, as Jet.com is not yet in the comp base.” Wal-Mart acquired online marketplace Jet.com in August for $3.3 billion.

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Wal-Mart executives on the call also addressed the retailer’s buying spree. The retailer has made several high-profile acquisitions of e-commerce players in 2017, including Moosejaw, ShoeBuy, and most recently vintage-inspired apparel retailer ModCloth. The deals have mixed results among retail industry experts.

McMillon told analysts Wal-Mart is not trying to buy its way to greater online market share, but is aiming to build its product inventory and overall e-commerce knowledge base.

“We also made a few small but strategic e-commerce acquisitions to further improve our assortment, while gaining critical category expertise in higher-margin categories like shoes and apparel,” he said. “The acquisitions have received a lot of attention, but our plan in e-commerce is not to buy our way to success. The majority of our growth is and will be organic. The acquisitions are helping us speed some things up.”

For its fiscal first quarter of 2018 ended April 28, Wal-Mart reported:

  • Net revenue of $117.542 billion, up 1.4% from $115.904 billion last year.
  • U.S. sales of $75.436 billion, up 2.9% from $73.295 billion last year.
  • Net income of $3.152 billion, down 2.0% from $3.216 billion last year.

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