This archive report was first published on 3 July 2019.
As of 2019, Walmart, the world's largest retailer, was struggling to match Amazon's e-commerce prowess due to its limited financial resources. The company's e-commerce push has been hampered by its lack of e-commerce fulfillment centers, a key finding of a comprehensive report by Recode's Jason Del Rey published on July 3, 2019.
Amazon, on the other hand, has invested heavily in its logistics infrastructure, with 110 fulfillment centers in the US compared to Walmart's 20. Building more of these centers requires significant investment, as seen in Amazon's newest fulfillment center in New Haven, Connecticut, which cost $250 million to build.
Amazon's financial muscle is evident in its ability to invest in its e-commerce infrastructure, including its push for one-day delivery, which will cost the company $800 million in investments this year. In contrast, Walmart's current ratio, a measure of its ability to meet short-term debts, has hovered around 0.75 this year and last year, indicating limited financial flexibility.
Investors often look for a current ratio above 1.0, which indicates that a company has more cash on hand than debts that need to be paid off in the last year. Amazon's current ratio was 1.1 in 2019 and 2018, while Walmart's ratio is below 1.0, suggesting that its short-term liabilities outweigh its assets.
