Walmart has built a digital powerhouse — with the help of WhatsApp

Walmart is sliding into Chile shoppers’ direct messages — and it’s working.

The retail giant’s WhatsApp app asking if customers would like to restock their usual items is so successful that it forms the basis of a fifth of its domestic e-commerce business, the company said, a development that highlights how far Walmart (WMT) has come since its days as a big chain.

E-commerce represents nearly a third of Walmart’s international business, and about half of its sales in China, the company said Thursday. Walmart’s U.S. e-commerce transactions jumped 28% last quarter, the company said. Digital sales have now risen more than 20% in the United States for seven straight quarters, Walmart executives said on a conference call Thursday.

Walmart has improved its approach to handling digital orders, making its e-commerce business profitable, company leaders said. About half of the materials handled by U.S. fulfillment centers are handled by automation, and many stores receive merchandise from automated distribution centers, they said. This helped Walmart cut its expenses by about 30% for several quarters, the company said.

“The results we are delivering today are powered by our people and technology,” CEO Doug McMillon said, according to a conference call transcript made available by AlphaSense. “We continue to get better at operationalizing our data, building more capable technology products and platforms, and by deploying physical automation.”

Walmart on Thursday released results that beat analysts’ expectations, raising its outlook for the full fiscal year. John Furner, president of Walmart US, will soon take over as CEO. Walmart shares rose 6% after it announced its results. Shares are now up about 18% so far this year.

The retailer is optimistic that stepping up its focus on digital sales will pay off, even as pressure on some consumers grows. Walmart has had successes with customers across the income spectrum, but said the gains have been more pronounced among higher-income earners, and some lower-income households are cutting back on their spending.

Walmart is partnering with OpenAI to improve the purchasing experience for those who shop via ChatGPT. It is also trying new ways to reach customers, who are increasingly ordering items online for delivery, or for in-store pickup.

In Chile, Walmart fills customers’ digital shopping carts based on their previous orders, and invites them to review orders through a WhatsApp message, said Katherine McLay, CEO of Walmart International. The tactic is so popular that Walmart plans to use it in other markets, she said.

“They can see that we’ve created a basket for them that actually contains all the brands that they typically buy in the time periods that they want to buy, and they have complete agency over it,” McLay said. “We know what they want, we can anticipate it and make their lives easier.”