Walmart is to open a third distribution centre (DC) in Brazil in August, according to press reports. The new facility will be dedicated to supporting the growth of its e-commerce business in the country.

Supports expansion in emerging market

As the world's fifth largest grocery market, and with a rapidly expanding middle class, Walmart has prioritised Brazil as somewhere it could generate significant levels of e-commerce business. The new DC will provide additional capacity within Walmart's distribution network to support the level of growth the retailer is looking to achieve.

Walmart has had a presence in Brazil since 1995 and launched an e-commerce operation there in 2008. Since market entry Walmart has grown to become the country's third largest retailer, operating 532 stores under ten different fascia.

Provides dedicated fleet

The new DC is expected to increase the logistics capacity of Walmart’s online business in Brazil by 50%. The new DC will employ 200 people.

In addition, the retailer also plans to put into service a fleet of trucks exclusively dedicated to its e-commerce operations.

Investing in improvement

In 2011, Walmart announced it would invest 1.2 billion Brazilian reais (£377.4m) to open and refurbish stores and improve logistics systems, technology and support programs for suppliers. As well as the new distribution centre, the retailer is opening a further 63 stores in the country during 2012, creating further need to strengthen the DC network.

Looking further ahead, Walmart announced at its Q1 results presentation it intended to slow store opening in developing markets such as Brazil and instead focus on improving operational execution and implementing an everyday low cost operating model and price position.

For more about operating a responsive and effective multi-channel supply chain in the Brazilian grocery market, click here.