Walmart China, Meituan in strategic partnership

People shop for groceries at a Walmart in Chongqing on Feb 8. (SUN KAIFANG/FOR CHINA DAILY)

Walmart China and Meituan, an online service platform, announced details of a strategic partnership on Tuesday, designed to enhance and expand real-time retail operations and capabilities.

The collaboration will focus on improving merchandise diversity, operational efficiency, digital customer engagement and marketing capabilities.

Walmart stores across China are now fully integrated with Meituan's distribution platform.

Zhu Jun, chief procurement officer at Walmart China, said the company has built an omni-channel retail matrix that combines online and offline services, catering to diverse shopping scenarios and delivery needs.

"We aim to provide consumers with high-quality, diversified retail options through a seamless integration of platforms and channels," Zhu said.

Xiao Kun, vice-president of Meituan, said the company's flash purchase business is designed to deliver "everything home in 30 minutes, anytime, anywhere".

Xiao said the platform has expanded from offering food delivery to meeting broader consumer demands, supported by its extensive merchant ecosystem and product range.

E-commerce now accounts for half of Walmart China's business, reflecting the growing importance of online platforms. "The addition of more distribution platforms provides consumers with greater choice and convenience," said Jason Yu, general manager of CTR Market Research. Yu said real-time retail competition is intensifying in China, with platforms like Meituan, JD, and Ele.me offering subsidies to attract market share.

According to the 2023 China Real-time Retail Industry Market Research Report, the sector has maintained an average annual growth rate of over 50 percent. The market size reached 504.3 billion yuan ($69.22 billion) in 2022 and is expected to triple that of 2022 by 2025.

The partnership comes amid Walmart China's strategic realignment. In September, Walmart sold its stake in delivery platform Dada to JD, following its exit from JD entirely a month earlier, ending their eight-year partnership.

In the third fiscal quarter, the retailer has seen net sales in China climb 17 percent year-on-year to $4.9 billion, with comparable sales up 15 percent and net sales of e-commerce rising 25 percent, bolstered by robust growth during the Mid-Autumn Festival holiday.

Both Sam's Club and its hypermarkets saw steady gains in offline traffic, according to Walmart China. Its net sales in the first three quarters totaled $15.2 billion, a number that has already exceeded last year's total of $12 billion.

The country's retail landscape showed steady growth during the quarter. Fast-moving consumer goods sales grew 0.8 percent in the first three quarters, with volume up 4.6 percent and average prices down 3.6 percent, said Kantar Worldpanel's China Shopper Report 2024. Offline trade, which rose by 1.8 percent in sales in the first three quarters, expanded market share among supermarkets, small supermarkets and grocery stores, said Kantar Worldpanel.