Wal­mart up­beat af­ter China suc­cess

China Daily (Latin America Weekly) - - Front Page -


Dur­ing the third quar­ter, Wal­mart China launched three new joint ini­tia­tives with JD, an on­line mar­ket­place in China. In ad­di­tion, Wal­mart an­nounced a $50 mil­lion strate­gic in­vest­ment in New Dada, China’s largest lo­cal on-de­mand lo­gis­tics and gro­cery O2O (on­line-to-off­line) e-com­merce plat­form.

The two-hour de­liv­ery ser­vice is avail­able via JD to con­sumers within a 3 kilo­me­ters ra­dius of more than 40 Wal­mart stores in Guangzhou, Shen­zhen, Bei­jing and Shang­hai. The ser­vice is ex­pected to ex­pand to more Wal­mart stores in Chengdu, Wuhan and other cities, the com­pany said.

“We re­cently an­nounced we own roughly 10 per­cent of JD’s shares. Through the al­liance with JD, we hope to fur­ther strengthen the part­ner­ship with JD,” said Doug McMil­lon, pres­i­dent and CEO of Wal­mart.

McMil­lon said China is an im­por­tant source of global retail growth, and Wal­mart is grab­bing the op­por­tu­nity by ac­cel­er­at­ing the com­pany’s om­nichan­nel sales ca­pa­bil­i­ties.

With im­prov­ing sales and in­creased foot­falls at its stores, Wal­mart said the in­vest­ment in e-com­merce, home gro­cery de­liv­ery and curb­side pickup, have been key to keep­ing the store com­pet­i­tive.

Mean­while, the US-China trade ten­sions with steep tar­iffs on $250 bil­lion worth of Chi­nese goods is some­thing the firm “will man­age through”, re­gard­less of what hap­pens, said Wal­mart Chief Fi­nan­cial Of­fi­cer Brett Biggs.

He said the prospect of US tar­iffs in­creas­ing in Jan­uary to 25 per­cent is “not pos­i­tive”, since prices will go up, and Wal­mart would pre­fer to see a res­o­lu­tion. But he noted that con­sumers are ex­pected to con­tinue to be in “good shape” go­ing into the hol­i­day shop­ping season.

Wal­mart be­came the world’s largest re­tailer in 1990. In 1996, the tra­di­tional re­tailer es­tab­lished its own e-com­merce web­site. In 2010, it launched a third-party e-com­merce shop­ping plat­form. By April this year, the plat­form had about 18,000 sellers, ac­cord­ing to global con­sul­tancy KPMG.

“In the past five years, Wal­mart has been buy­ing global e-com­merce plat­forms and de­liv­ery plat­form en­ter­prises, and push­ing for­ward the co­or­di­nated growth of its retail sales and ser­vices. It has ac­ti­vated the global lay­out of retail ser­vices,” said Mao Jian, part­ner of IT ad­vi­sory of dig­i­tal and cus­tomer prac­tice at KPMG China.

In 2015, Wal­mart started to wholly own on­line gro­cery store Yhd in China. The com­bi­na­tion of lo­cal ad­van­tage of Yhd and Wal­mart’s global pro­cure­ment re­sources, retail stores and sup­ply chain has helped it to record more growth in China.

“Now, the com­pe­ti­tion be­tween re­tail­ers has shifted to the abil­ity to sat­isfy im­me­di­ate de­mand of con­sumers. Tra­di­tional re­tail­ers are con­tin­u­ing their trans­for­ma­tion to de­velop dig­i­tal sales chan­nels, and ex­press de­liv­ery ser­vices have em­pow­ered tra­di­tional re­tail­ers,” Mao said.

In the fu­ture, on­line and off­line sales will fur­ther fuse to­gether, and qual­ity ser­vice is highly im­por­tant to re­tail­ers, KPMG said in its Novem­ber re­port on the retail in­dus­try.

Xin­hua con­trib­uted to the story.


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