With its place in the U.S. market firmly established, Walmart is setting its sights on China. The retailer is investing $1.2 billion in its Chinese operations, primarily to cover distribution and grocery delivery costs. Now, Walmart is ramping up its expansion efforts in the country, recently announcing plans to open 500 new stores in China over the next five to seven years.
Walmart is looking to leverage "multi-format strategies to bring customers freshness, value, and convenience," James Ku, SVP of Realty for Walmart China, commented in a statement. "We will continue to collaborate with partners and policymakers in China to accelerate our expansion," he continued.
Although the Chinese economy has been slowing, the country is still expected to become the largest grocery market in the world by 2023, with online sales alone anticipated to quadruple to $205 billion, according to a report from research company IGD Asia. And Walmart plans to claim a significant portion of that retail market and has already seen success in the country. According to CNN Business, the retailer has seen its China sales grow by 6.3 percent in the last quarter compared to the same period last year, significantly higher than its 2.5 percent of its global sales growth.
More than 20 years ago Walmart entered the China market, the news source reports, and as of January, 2019, the retailer had 443 stores in the country, including its Sam’s Club banner. In addition to the planned 500-store expansion, Walmart intends to remodel more than 200 of its China stores over the next few years, and will be adding new consumer features, including innovative self-service cash registers where customers can pay for their products using facial recognition.
In addition to its brick-and-mortar expansion, Walmart has been boosting its e-commerce presence in the market as well. In 2016 the retailer sold its Chinese e-commerce site, Yihaodian, to JD.com, the second largest e-commerce company in China after Alibaba, CNN Business reports. JD.com now runs Walmart’s groceries and other products through its own shopping platform. More than 100 of the retailer’s roughly 400 stores in the country also serve as warehouses for JD.com.
Deli Market News will continue to report on the changing global retail landscape.