WALMART COMMITTED TO CHINA

Walmart's Asian CEO and President, Scott Price, has told a summit in Manila that he expects China to drive half of the retail sectors growth over the next decade.

China's retail market continues to boom

Despite the recent well publicised slowdown in China's economy, Price made the comments speaking at the Asia-Pacific Economic Cooperation CEO Summit this week. Although GDP growth in China has dropped below 7%, the retail market continued to grow 11% in September and October, and with events like Alibaba's Singles Day last week driving US$14.3bn of sales in one day, up 60% on 2014, China's retail market appears to be not just healthy, but flourishing.

Retailers benefiting from others success

Although not revealing numbers, Price also mentioned that Walmart's online business in China, Yihaodian, had "a great Singles Day". Whilst another online giant in China, JD.com, said that its saw strong numbers across different categories. Walmart stepped up its investment in Yihaodian earlier this year and is positioning itself for future growth. Large format stores in China, particularly those operated by international retailers, have faced challenging conditions in China over the past few years, but Walmart is backing that the combination of these operations, combined with a strong online offer, will give it a competitive advantage in the future. 

The importance of O2O will grow in the future

IGD already forecasts China's grocery market to easily be the largest online grocery market in the World and a recent report by HSBC, suggested that Online-to-Offline (O2O) sales in China grew 80% in H1 2015. As China's retail market matures, with more physical stores, O2O operations will become increasingly important, with shoppers ordering products online and picking them up in-store.

Price noted, "We think online-to-offline is critical, as customers look for convenience, and convenience is not just one mode. We think the convenience of having Online-to-Offline and the role that online will play is pretty important, especially as you start to serve tier three and four cities."