Walmart may become the new favorite of the American middle class by eating into Amazon's market share

Walmart appears to be stealing more of Amazon's premium consumer base, new data shows. Walmart's online subscription service is closing the gap with Amazon in a key group: wealthy shoppers.

Walmart launched the Walmart+ service, similar to Amazon Prime, in 2020. As soon as it was launched, the project resonated strongly with middle-class families eager to save money.

It is understood that the annual fee of Walmart+ is US$98, which is US$41 lower than Amazon's Prime , and the functions are basically the same, such as free shipping and free watching of member movies and TV shows.

However, Walmart members have one benefit that Amazon does not have: discounts at gas stations across the U.S. For Americans who are suffering from inflation, this benefit is very useful.

According to data provided by consumer research agency Prosper Insights & Analytics , as of February this year, 28% of American households with annual income of more than $ 150,000 are members of Walmart+, an increase of nearly 15% from the same period last year .

However, Amazon Prime 's registration volume is still far ahead, with 77% of middle-class households being loyal fans of Amazon , up 7 percentage points from the previous year .

That said, as Walmart gradually sheds its reputation of targeting only low- and middle-end consumers, attracting and retaining wealthy consumers has become Walmart's top priority. Walmart executives now see e-commerce as a major "weapon" to attract high-end consumers.

Currently, Walmart+ is experiencing the "flywheel effect" that Amazon Prime experienced when it was launched in 2005: as more and more consumers flock to the Walmart platform, more brands will also want to settle in Walmart, which will bring more consumers.

In addition to learning from Amazon's membership strategy, Walmart also took advantage of its strong offline store network. Consumers can choose to go to the Walmart store closest to them to pick up the items they bought online, which greatly increases consumers' willingness to shop online.

Walmart also has a huge advantage in fresh food. Walmart+ members can enjoy free delivery service for every order of $35, while Amazon raised the threshold for free delivery to $150 last month.

But it should be clear that Amazon remains the undisputed leader in U.S. e-commerce . According to Insider Intelligence , American consumers will spend $431 billion on Amazon this year , almost six times what they spend on Walmart.

Walmart is expected to capture 6.3% of the U.S. online market this year , a fraction of Amazon's 37.6 % .

Despite this, Walmart is gradually catching up with Amazon. In 2020, the company surpassed eBay to become the second largest e-commerce company in the United States.

And Walmart + has plenty of room to grow. According to a Morgan Stanley survey conducted in February, about 11 million U.S. shoppers are "very likely" to subscribe to the service, based on the approximately 18.5 million existing members.

As a strong competitor of Amazon, Walmart has also attracted more and more attention from sellers. If it maintains its current development momentum, it may be possible to compete with Amazon in the future.

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