Walmart on Tuesday announced the opening of its first small-format Walmart Supermarket in the Bao'an District, Shenzhen, China, about a tenth the size of a regular Walmart Hypermarket, according to a press release emailed to Retail Dive. Five more Supermarkets will open in Shenzhen, Guangzhou and Dongguan by the end of this year, the company said.
The store is an integrated online-offline experience, with the availability of 90% of its inventory (more than 7,000 of the more than 8,000 items) on the Walmart Supermarket at JD.com, according to the release. The soft-open debut set a record for stores on the JD.com platform, with more than 1,000 orders received online. The fastest delivery on opening day was less than 10 minutes from online order to the customer's door.
Walmart Supermarket uses resources at more than 400 Walmart stores across China, and tends to beat community supermarkets and convenience stores on price, the company said. A key feature there is Scan & Go checkout, which uses a WeChat mini program to scan barcodes as customers shop, and a high-tech stocking system that allows associates to fulfill orders as speedily as possible, enabling delivery as fast as 29 minutes to homes within 2 kilometers.
Thanks in part to its partnership with Alibaba rival JD, Walmart now appears to have accomplished in China what it's been steadily working toward at home — a tightly integrated online-offline operation. Urban Chinese consumers are used to buying most things online, particularly consumer goods and groceries, and its new Walmart Supermarket seems prepared to meet these high expectations.
In a two-month pilot, more than one in five customers chose Scan & Go (one of three checkout types), which bypasses traditional checkout with mobile payment, and about 95% said they'd use it again. More than 50% of Walmart Supermarket customers chose online ordering, Scan & Go or self-checkout during the pilot period.
"Walmart is proud to have been a part of the evolution of shopping in China since we opened the first Walmart Hypermarket here in Shenzhen in 1996," Elliot Dickson, Senior Vice President and Chief Operations Officer of Hypermarket, Walmart China, said in a statement. "We are introducing our new Walmart Supermarket to give customers an upgraded omnichannel experience that is rooted in their own community."
The company also said Tuesday that it uses electronic price tags in stores "to help keep prices up to date," which of course means it can raise or lower prices at will. The location has in-store tech to make shopping easier and features an assortment tailored to the local community with a mix of fresh foods, prepared meals, dairy, beverages and household supplies. Walmart Supermarket is also enticing shoppers to head in-store with services like laundry, key cutting, shoe repair and public transportation pass top-ups. Online services include e-gift cards, flower delivery, travel reservations and scheduling of services like home appliance maintenance.
The new store is a further offline extension of the partnership that Walmart and JD enjoy in China, which was solidified with the U.S. retailer's 2016 sale of Chinese e-commerce platform Yihaodian to JD.com. Walmart and JD have since integrated their customer loyalty systems for stores in China (where Walmart has 400 locations). The partners also plan to develop a program for JD.com to fulfill orders in China by relying on inventory from Walmart. That has led to speculation that any "partnership models" JD is considering for the U.S. could entail leveraging Walmart's vast brick-and-mortar store, warehouse and fulfillment network.