Walmart to launch US$104m food distribution and ecommerce center in China

ASIA – The world’s leading ecommerce and retail firm, Walmart is set to launch its first perishable food distribution centre, alongside ecommerce and delivery services in China.

Set to begin operations in March, the center is valued at US$103.7m (RNB700m) and will be located in Dongguan city, Guangdong.

The company is looking to boost its omni-channel as well as fresh food sales, a segment that showed significant growth in last year’s results.

“This is the largest investment by Walmart since it entered the Chinese market 22 years ago,” said Walmart China President and CEO Tan Wern-Yuen to China Daily.

“Our focus in 2019 is on consolidating upstream resources and to further improve product quality.”

He said the company is planning to build or refurbish 12 or more of such centres in China over the next two decades.

The rapid expansion could be explained by growing food segment, which contributed to 25% of sales for Walmart China.

Walmart is now focusing on its private fresh foods brand Marketside, a chain of grocery stores selling pizza, bacon, eggs, organic Ceasar salad, spinach dip, organic cage and bananas.

To increase turnover and address the need for convenience, the firm is banking on ecommerce and delivery services with plans to connect 300 of its stores to its JD Daojia delivery service.

Walmart China launched Next Generation Store in December, with intentions to expand the system o other locations in China, while also growing its e-commerce operations in other major Asian markets and the U.S.

In addition to growing retail innovation, Walmart is eying the rapid rise of delivery services in China.

According to Mary Meeker, e-commerce accounts for more than 20 percent of retail sales in China, the highest and fastest growing penetration rate in the world.

“Our Next Generation Store is a customer-centric move to better meet customers’ demand for quality and service up grade,” said Walmart China Stores Senior Vice President and COO Bernardo Perloiro.

“The Next Generation Store is one of our future strategic focuses, and we look forward to replicating the learnings across the country once the pilot is successful.”

Apart from a focus on design, comfort and more tailored selections, one of the main highlights of the store is its digital focus.

It incorporates Scan & Go, said to have accumulated 17 million users as of November 2018.

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