Earlier this year, Walmart sold off some of its Chinese eCommerce assets to a local Chinese company – seen by many as Walmart’s capitulation that they could not compete in a market as “difficult” as China. However, we now see that China is being far more aggressive in the Chinese market than anyone had imagined.
So it seems that while Walmart sees the barrier to entry in the Chinese eCommerce market as being high, they have set their sites on a new strategy – utilize a third parties network to leverage one of its greatest assets, which is its operational efficiency.
The company is doing this by launching a same-day delivery service in the Chinese market.
The competitive environment within the Chinese eCommerce space has been heating up over the last few years – AliBaba’s meteoric rise, coupled with Amazon’s entrance to the market has put Walmart on it’s heals. The selling off of much of its eCommerce business to JD spoke to how difficult it had become.
Bringing same-day delivery to Chinese eCommerce has the potential to be a boon for Walmart; as China’s economy has opened up in the last few decades, the Chinese consumer has become more and more like their Western counterparts – desire for the lowest prices and the greatest convenience. Given that the US and European markets are starting to shift towards convenience markets, it’s entirely logical that the Chinese market will do the same.
As Asian markets continue to catch up to their US and European counterparts, consumers will also become more demanding of retailers and shippers to provide better products at better prices with greater shipping options. They will also expect the overall delivery experience to be far superior to what it is now. As players like Walmart bring services that were once only available in US markets, the Chinese consumer will benefit from economies of scale and competition that will play to their benefit.