Encouraged by the 2018 success, the retailer plans to further its online/offline integration with focus areas clearly identified.
Three main areas to drive further success
The integration will prioritize:
- Fresh food distribution centres
- Private brands and
- Membership services.
Below are a few highlightes of what Walmart China achieved in these areas.
Fresh food accounted for one quarter of sales
Getting fresh food right is important for the company as it accounted for 25% of Walmart China’s total sales in 2018.
In march 2019, the retailer will launch its first perishable food distribution centre in Dongguan, serving its stores in South China.
The retailer plans to invest more than US$103.7mn in the centre, the largest investment by Walmart since its entrance to the market 22 years ago. In the next 20 years, Walmart China plans to build or renovate at least a dozen of such centres in China to provide better quality fresh food to customers.
Source: IGD Asia
Private label sales up by 30% YoY
Walmart China’s private label goods have grown 30 percent annually in 2018. The range includes Great Value for grocery, Marketside for fresh food and new clothing brand George.
ecommerce had triple-digit growth
Tan Wern-Yuen, president and CEO of Walmart China, said the company’s ecommerce had a revenue growth of 150% YoY in 2018, a third consecutive three-digit rise. Logistics and payment method are the two strategic areas:
Logistics: the CEO said company will expand its JD Daojia delivery services, planning to connect 300 Walmart stores to JD Daojia services.
Payment method: Walmart implemented WeChat Mini program "Scan and Go" in all its stores and had more than 20 million users by the end of last year. In terms of number of users, it is ranked No 1 mobile app among those developed by retailers nationwide.
Source: IGD Asia
Revenue of Sam’s Club up by 8% YoY
Sales of Walmart’s high-end membership store, Sam’s Club, increased by 8% in 2018. The company attributed the growth to online delivery services and electronic membership card that was introduced recently.
The company added four new Sam’s outlets last year and launched one-hour delivery services in Shenzhen, Shanghai and Beijing. More than 70% of the members use Sam’s Club app and electronic cards.
Retail Analysis weekly newsletter