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Walmart Seeks to Grow Its Chinese Businesses

The World Economic Forum’s 45th Annual Meeting was held in Davos, Switzerland, in 2015. At the event, Premier of the State Council of the People’s Republic of China Li Kequiang said, “It must be pointed out that China is still a developing country and still has a long way to go before achieving modernization.” Despite what seems to be a looming trade war between the U.S. and China, Walmart looks to be taking advantage of the situation Mr. Kequiang opined about.

Walmart is looking to make further inroads in China’s retail market and its 1.4 billion population by expanding omni-channel services, and increasing its hypermarket network, high-end membership stores and supermarket formats. The chain is looking to drive innovation in China in three categories: low price and quality merchandise, redefining assortment through learning from partnerships and competitors, and creating fun and efficient shopping experiences for customers, reported China Daily (April 3).

Part of these plans include a focus on expanding the number of Sam’s Club stores within the nation. By 2020, Walmart hopes to have 40 locations throughout China. To boost membership, Walmart plans to improve fresh food quality and stock more private brands, according to Walmart president and CEO Doug McMillon. Walmart will invest some $111.6 million in its perishable delivery center, representing the company’s single largest investment in China thus far. The center is expected to be operational by the end of 2018.

To this end, Walmart opened its first small-sized high-tech supermarket in China, which will stock products that customers will also be able buy on JD.com. The store will stock more than 8,000 food items, 90% of which will be available online. Additionally, customers will be able to use the WeChat messaging app on their smartphones to place orders remotely, reported Reuters (April 2).

However, the retailer is not focused on new markets alone. Walmart plans to reduce greenhouse gas emissions in its China value chain by 50 million metric tons by 2030. To accomplish this goal, the company aims to enroll all of its export and domestic suppliers in China into an emissions reduction program known as Project Gigaton, starting with 100 of its top suppliers. Over 400 suppliers in China, India, the U.S. and other countries have joined the project so far.

“As a global company, we are proud to use our reach to help create a more sustainable future, for our customers, associates, and the communities we serve,” McMillon said. “We believe that business can accelerate environmental progress while delivering economic growth. That’s why we’re committed to taking a shared value approach to our work in China and around the world.”

“Walmart has a rich history of collaboration with key stakeholders in China and we’re excited to bring our latest sustainability initiative, Project Gigaton, to China,” said Wern-Yuen Tan, president and CEO of Walmart China. “Integrating more sustainable practices into our operations, resource management and sourcing efforts can spur technological innovation, inspire brand loyalty and increase associate engagement.”

Mr. Kequiang is attributed with another quote: “Changes call for innovation, and innovation leads to progress.” It seems Walmart was paying attention to this quote, too, as it looks to expand in a market more than triple that of the U.S.