In fiscal year 2024, Walmart China delivered a stellar performance. According to the latest financial report, Walmart China's annual net sales reached $20.3 billion (approximately RMB 147.3 billion), a year-on-year increase of about 13.3%, hitting a record high. Among these, Sam's Club and e-commerce business became the core growth engines, driving Walmart's omni-channel transformation in China into a new phase. Sam's Club The membership economy dividend behind high growth At the earnings call, Sam's Club received high praise from senior management. Walmart's Executive Vice President and CFO John David Rainey stated, "In China, Sam's Club membership fee income grew by more than 35%, with a continuous increase in member numbers." Behind this success lies Sam's precise membership positioning. By offering a curated SKU selection (approximately 4,000 products), bulk packaging, and exclusive private labels (such as Member's Mark), Sam's targets middle-class family needs with differentiated product assortments. For example, during the Spring Festival, limited-edition gift boxes and premium fresh products drove significant sales growth, contributing positively to the quarter's year-on-year growth earlier than last year. In China, this membership model has entered a phase of rapid development. Over the past 12 months, Sam's Club opened 6 new stores, with 4 in the fourth quarter, covering new first-tier and second-tier cities such as Dongguan, Wenzhou, and Quanzhou. Through a "down-market expansion + omni-channel" strategy, Sam's is building a broader membership network. Image source: Walmart recruitment information Currently, according to Walmart's official recruitment information, Sam's Club has 5 new stores in the critical pre-opening preparation stage. These new stores include Sam's Club locations in Jiaxing Economic Development Zone (Zhejiang), Hefei Economic Development Zone (Anhui), Jiang'an District (Wuhan), Zhongshan City (Guangdong), and Zhangjiagang City (Jiangsu). The release of "recruitment" posters indicates that the opening of these stores is imminent. Notably, among these five new stores, the number in non-provincial capitals, prefecture-level cities, and county-level cities has increased significantly, showing Sam's Club's further expansion into lower-tier markets. Of course, it's not just Sam's; today's "down-market" has become a battleground for major retail leaders. In 2024, Hema opened 72 new stores, one-third of which were in second- and third-tier cities and county towns. Among the 59 "billion-yuan counties" nationwide, more than half are in the Yangtze River Delta, where some regions already see multi-brand competition, further highlighting the immense potential and intense competition in lower-tier markets. E-commerce business: The cost game behind an "efficiency revolution" Walmart's contraction and Sam's proactive expansion align with the trend of China's urban middle-class families reaching scale and surging demand for quality consumption. But it also benefits from a unique opportunity in the Chinese market—near-field e-commerce. The financial report shows that in the fourth quarter, Walmart's global e-commerce sales grew by 16%, driven by store pickup and delivery services. Among these, Walmart China's e-commerce sales grew by 34% in the fourth quarter, reflecting Walmart's expansion of consumption scenarios and continued investment in omni-channel layout. Specifically, in China, about half of Walmart's sales come from digital channels, partly thanks to a network of 350+ Sam's Club distribution points that offer one-hour delivery to members and expand the coverage of traditional Sam's stores. "Packages are no longer delivered to one household on a street but to four or five households on that street, so we can spread these costs across more packages. As more customers use our e-commerce, this really improves unit economics," Rainey said at the earnings call when discussing the drivers of e-commerce growth. Furthermore, "now over 30% of customers pay extra for delivery within one or three hours." He believes that newer parts of Walmart's business, such as memberships and advertising, will continue to have significant room for growth and improve the company's profit margins. Through a dual strategy of centralized delivery (covering multiple orders in one trip) and additional member services (such as expedited delivery), Walmart is restructuring its unit economic model—simultaneously diluting fulfillment costs and activating profit levers, achieving a dual breakthrough in cost optimization and profit growth. "We are learning from markets like China and quickly building rapid delivery solutions in other markets," said Walmart's global CEO Doug McMillon. In the future, the value of the Chinese market lies not only in its scale but also in its ability to generate replicable technologies and methodologies, using China's innovation engine to drive global growth. Hidden concerns and the future The sustainability test behind high growth When discussing performance expectations, Rainey said: "We have been operating in a highly volatile environment for several years, and we expect this year to be no exception. Our outlook assumes a relatively stable macroeconomic environment, but we also acknowledge that consumer behavior and global economic and geopolitical factors remain uncertain." Historically, the transformation path for traditional retail giants has always been challenging. Despite impressive results, Walmart must remain vigilant against the "hidden reefs" behind growth: Membership model involution—When Sam's Club attracts users with a "middle-class lifestyle" anchor, industry competition has quietly escalated. Some local brands compete with lower annual fees and more flexible membership benefits (such as free shipping and localized services), and Sam's differentiation barrier faces dilution risk; Generational consumption shifts—Generation Z's interest in "stockpiling shopping" is declining, and Sam's bulk packaging strategy may face challenges, requiring exploration of more flexible product combinations. Additionally, young users' preference for a full-chain consumption experience of "online seeding + offline experience + instant delivery" places higher demands on inventory coordination and data integration. Despite future uncertainties, Rainey is confident about the new fiscal year. He said Walmart has taken a similar approach to the preliminary performance expectations of the previous fiscal year, "balancing known risks and risks we can control, just like in past years. We still believe Walmart can continue to create value for customers and shareholders as it has in recent years."
Final Thoughts
In the future, as consumption stratification intensifies and retail technology iterates, whether Walmart can continue to lead depends on its ability to find a dynamic balance between efficiency and experience, globalization and localization, membership growth and profitability. For China's retail industry, this "membership war" ignited by Walmart may just be entering the middle game. However, Walmart China's growth curve also reveals a deeper industry shift: The future of retail may no longer depend on "where to sell" or "what to sell," but on "how to create more precise value in a more intensive way." Walmart's practice is both a response to China's market segmentation demands and a stress test for global retail transformation. When a traditional giant turns around, it leaves behind not only performance numbers but also a methodological sample of "resilient growth." 【New Order · Symbiosis】 ****The 10th China FMCG Innovation Conference Time: March 17-19, 2025 Location: Chengdu, China