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Wal-Mart’s tiny warehouse in eastern Shanghai doesn’t look like much. But it’s a key part of the company’s strategy to win over grocery customers in China who are fast heading online.
It’s one of 250 hubs that Wal-Mart’s Yihaodian e-commerce venture owns and operates in 200 cities, mostly concentrated in eight key cities like Shanghai and Beijing. All offer quick delivery of groceries.
The company has been stepping up its efforts to get a bigger share of China’s overall online business, which now has surpassed the US and dominates globally. Last July, four years after buying a minority stake, the world’s largest retailer took full control over Yihaodian, founded in 2008.
But Wal-Mart’s overall online share is tiny in China, and some analysts say it’s going to be hard to close the gap with the big Chinese giants like Alibaba and JD.com.
Where Yihaodian has 250 hubs, Alibaba has 14,000 in rural China alone that act as pick-up stations. And as of late March, JD.com had a total of nearly 6,000 delivery and pickup stations in 2,493 counties and districts across China.
Jason Yu, general manager of Kantar Worldpanel China, which specialises in research on Chinese shopping habits said, it will be very difficult for Wal-Mart to catch up in e-commerce.