Walmart Rethinks Its China ‘Hypermarket’ Strategy Amid Alibaba Gains

 

·         Company facing slowing hypermarket sales amid e-commerce shift

·         Growing demand for premium shopping moves focus to Sam’s Club

 

Bloomberg News

September 9, 2021

 

In the months before the delta variant upended domestic travel in China, Walmart Inc. would regularly have employees fly to cities like Shanghai to observe and take photos of what its competitors were up to, according to people familiar with company’s practices. At times, they got caught and were asked to leave.

 

While checking out rivals is not uncommon in the industry, the task took on added urgency for the world’s biggest retailer in the past year. A quarter century after it entered China and transformed the way people shop for groceries, Walmart is at a crossroads. It’s fallen from No. 2 in 2011 to fourth in China’s hypermarket sector, with no gains in market share, and cutthroat competition from local players like e-commerce giant Alibaba Group Holding Ltd. has already forced out Germany’s Metro AG and France’s Carrefour SA.

 

Walmart has taken solace in the success of its members-only franchise, Sam’s Club. In contrast to the U.S., where the brand is seen as a no-frills, bulk shopping destination, in China it sells premium, imported products, attracting middle-class shoppers. But more rivals are now entering the membership shopping space, as well, triggering a rethink of Walmart’s strategy in a market which, while only accounting for 2.1% of global revenue, represents a major strategic and growth opportunity for the retailer...

 

more, including links, charts  

https://www.bloomberg.com/news/articles/2021-09-08/challenge-from-alibaba-forces-walmart-to-rethink-china-strategy