How did Walmart digitalize in China with its partners JD and Tencent?
The meteoric rise of Walmart
Walmart China arrived in China with its first store in Shenzhen in 1996. The American brand has been driven to innovate by local competitors from the tech world, such as Hema / Freshippo (Alibaba’s food chain) or Yonghui Superstore’s Super Species, of which Tencent holds 15%. These competitors follow a “New Retail” model that combines online and offline sales.
To cope with this competition, Walmart initially partnered with the online shopping startup Yihaodian, in which it invested in 2011, but which never managed to compete with Alibaba. The brand then decided to cooperate with the already well-established tech giants. In 2016, Walmart China sells Yihaodian to JD.com, and buys a 5% stake in JD for $1.5 billion.Walmart now owns 12% of JD.
JD then embarks on the delivery of food goods. The company partners with Dada, the on-demand delivery platform, and creates a joint venture: JD Daojia. Today, JD Daojia partners with more than 89,000 stores in 700 cities in China to deliver in less than 30 minutes. Walmart thus becomes, just like Hema/Freshippo, both a supermarket and a distribution center for e-commerce. Walmart and JD co-invested $500 million in JD Daojia in 2018. which just went public on June 5. It grew by 60% in 2019, despite a very competitive environment with other platforms such as Meituan (which became number 3 after Alibaba and Tencent) and Ele.me (owned by Alibaba).
In addition to this partnership with JD, Walmart is also partnering with Tencent and is one of the first brands to create its “Scan and Pay” mini-program in the WeChat messaging platform in 2018. The mini-program allows users to scan the QR codes of products in the supermarket with their phone and pay online, without going through the checkout, and have their shopping cart sent home if they wish. The mini-program was an immediate success. Between April and September 2018, 10 million Chinese used the mini-program. 30% of transactions were completed via this feature. The same functionality was tested in the US but its lack of popularity forced Walmart to back down. Walmart has become a preferred partner for Tencent in its New Retail strategy to deal with Alibaba. The American brand has completely stopped its partnership with Alipay, the payment method offered by Alibaba.
Today, Walmart China operates more than 400 stores in more than 180 Chinese cities and plans to open 30 to 40 new stores per year. Although China’s GDP has fallen to its lowest level following the trade war with the USA, Walmart sales in China increased by 6.3% (worldwide growth is 2.5%). Walmart plans to invest approximately $1 billion in the region to compete with local rivals and online retailers, and invest in innovation.
Why visit the store?

Scan your products yourself
Use the WeChat mini-program “Walmart Scan & Go” to scan your products yourself.
You pay by WeChat Pay and you will then have to scan your bill at the kiosk outside the store, where an employee is present to assist you if needed. There are hardly any cashiers left in the store.

Select in store and have it delivered to your home!
No need to carry your bags home! You can choose to have your shopping delivered to your home, while selecting the products yourself in store.

Weigh your food without having to select the product category
Thanks to the visual recognition, no need to select whether it is an apple or an orange. The machine identifies the fruit or vegetable and offers it to you in the first choice. You just need to confirm.

Pay by facial recognition
Walmart also incorporates facial recognition payment methods. If this is the first time you pay by facial recognition, you will need to enter your phone number, and the next time you only need to enter the 4 confirmation numbers that will be sent to you on your phone once your face is identified by the terminal.

No need to visit the store!
With JD Daojia, you don’t need to visit the store and can have your groceries delivered directly to your home in 30 minutes! The store is also used as a warehouse for online commerce, and you will see staff preparing orders from Internet users.
