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Wal-Mart's Online Presence Will Need Time: Analyst

Wal-Mart's presence in the online marketplace will add competition for sites such as Amazon and eBay, but it's too soon to say whether it will significantly impact the established online retailers, said Imran Khan, Internet analyst at JPMorgan.

Walmart Store
Source: Walmart
Walmart Store

"EBay and Amazon , they are very big companies, and so is Wal-Mart ," Khan said. "So I think, you know, just somebody getting into the market not necessarily creates a trade."

The top two reasons consumers shop online are price and selection, Khan said. Although Wal-Mart is the largest retailer in the world — and the 13th largest online retailer — it still needs to increase its selection. Adding third-party sellers is an easy way to do this, Khan said.

But Wal-Mart faces challenges in establishing an online presence and consumer awareness. It also needs to develop a way to guarantee quality for its customers, he said.

"None of those are very easy to do, and it takes time to do it," he said. "I think it will take a long time for Wal-Mart to become a player."

JPMorgan has a neutral rating on eBay, and Khan said Wal-Mart poses a bigger threat to it than to Amazon.

Wal-Mart's marketplace will at first feature CSN Stores, eBags, and Pro Team sports apparel and collectibles, but Khan thinks it will add more companies over the next year, he said.

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JPMorgan has investment banking clients who own shares of Wal-Mart and eBay.

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