Walmart is known across the world for its low prices and its innovative approach to customer service. In the US, they are a major national chain, and constantly seen to be exploring new retail ideas such as apps and self-service payment in stores.
However, Walmart is seen quite differently in China. They entered the Chinese market in 1996, which was early compared to many other foreign retailers. They have expanded to over 400 stores, but they do not dominate the market in any way. A recent article in Business Insider explored some of the issues Walmart appears to face in China:
- Prices are higher than other supermarket chains
- Quality of the stores is lower than most Chinese customers expect for a foreign brand
- A poor ability to vary inventory in different cities
- Huge range of packaged goods that are probably easier to buy online
- No focus on the type of customer they want—it feels like a discount store, but also sells expensive drinks for over $200 a bottle
While the Business Insider article is extremely critical, Walmart remains the most popular international supermarket brand in China. Clearly they have problems defining their strategy for China as their growth has stalled, but do they have any new ideas that might revive the interest of the Chinese consumer?
A recent announcement has indicated that they may finally have a new strategy. The first high-tech Walmart has just opened in Shenzhen and is aimed at creating a closer link with their online shopping partner JD Daojia, an affiliate of JD.com. The store has around 8,000 items, over 90 percent of which will also be available online. The customer can pay using a smartphone and items can be delivered inside a radius of two kilometers within 29 minutes.
This focus on convenience, home delivery, and a smaller range could create new opportunities for Walmart in China. It’s clear that the brand has struggled to get beyond their existing market penetration in China, but a new focus on the customer experience and a tight connection of online and in-store retail processes could set them on a new path. Retailers across China will be watching the new store in Shenzhen closely to see how this experiment in omnichannel retail works out in the Chinese market.
Let me know what you think about the Walmart experiment and how a focus on the omnichannel customer experience could help them grow. Leave a comment here, or get in touch via my LinkedIn.