Walmart China is outperforming the retailer’s other international operations after adapting its traditional supermarket business to a market where shoppers increasingly expect groceries to arrive within minutes, rather than days.
Christina Zhu, president and chief executive of Walmart China, said the company’s sales in the country rose by 20.7 per cent in the latest quarter, compared with 2.6 per cent growth in the US. She was speaking at the Fortune Leaders Forum in Macau on 8 September.
“Customers everywhere want similar things—they want assortment, value, convenience and emotional experiences,” Zhu said. “But in China, there’s a whole different degree of intensity: Convenience might be defined elsewhere as receiving an online purchase in three days. Here, it’s [more like] 30 minutes.”
Walmart China’s shift to omnichannel retail
The performance comes as Walmart China completes a major shift from a store-led model to an omnichannel operation combining physical shops, delivery services and digital ordering. More than half of its Chinese sales now come from online purchases.
Walmart opened its first Chinese outlet in Shenzhen in 1996, before the country joined the World Trade Organisation. It now operates almost 300 Supercenters in more than 100 cities, with stores also serving as fulfilment centres for online orders.
The retailer has expanded its delivery offer through digital platforms and smaller community shops, with Walmart China describing 30-minute delivery as a central part of its convenience proposition. Its community-store format is being developed in Shenzhen alongside larger hypermarkets and online services.
“Coming from a traditional business, it took a lot of effort to try to transform the organisation,” Zhu said. “I think we’ve passed that [hurdle] and are today a fully-fledged omnichannel company.”
Walmart has opened more than ten stores in China over the past year, at a time when several Western brands have faced a tougher trading environment in the country. Zhu said the company’s approach was not based on imposing a fixed international formula, but on responding to local shoppers.
“I only have one boss, and my boss is the Chinese customer,” she said. “We’re not here to propagate any particular [business] model, but rather to serve our customers.”
The company’s Sam’s Club warehouse business is also expanding. The members-only chain opened its sixth Beijing outlet in Fangshan last week and is aimed primarily at upper-middle-class urban families, while Walmart continues to develop smaller neighbourhood stores for more frequent purchases.
Zhu said the company’s enduring principles remained unchanged, but that its methods had to evolve as technology and consumer habits shifted.
“Certain things—like our values and purpose of helping customers to save money and live better—don’t change,” she said. “But everything else must change, because…technology and consumer behaviour will change.”
