China: Walmart invests in online fresh food sales

In February 2018, Wal-Mart will stop writing the "mart" part as a separate word and officially rename itself as Walmart. The world's largest retailer is going to change its 48-year-old name in order to emphasize its ambitions on both the online and offline markets. Walmart and JD.com signed a strategic agreement in June 2016. The cooperation was very successful and the companies decided to increase their sales of fresh products in 2018.

This year, Walmart and JD.com are going to strengthen their cooperation and put more resources into their logistics. Walmart is going to integrate further into JD's logistics system and to increase the cooperation between JD Plus and Sam's Club. This way Sam's club would be able to deliver their high-quality fresh products within a wider range. To achieve this goal, Sam's Club is going to use distribution centers organized by Walmart and Dada. The distribution centers will be able to manage about 1000 SKU. The vast majority will be high-quality fresh products about 20% of which will belong to Sam's Club.

The distribution centers are very important for a few reasons. Firstly, there is a desperate need for them in fresh meat sales. Secondly, people need to buy fresh products very often. If they realize that they can easily buy them online and turn it into a habit, it will increase the sales significantly. Talking about the negative aspects, Chen Zhiyu said that the promotion might become a weak point. The companies are not used to constantly promoting fresh products, which is crucial for online sales. Companies draw on the experience of offline businesses. It is also important not to create too many SKU, otherwise it could turn too messy.

Source: Tensent

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