Eight Years of New Retail, the Winner Turns Out to Be Sam's Club

In the midst of an industry craze, do you go with the flow or against it? Chen Zhiyu decided to go against the new retail tide. It was 2017, when new retail was in full swing, but Chen chose to leave Alibaba and join Walmart China to oversee Sam's Club's e-commerce business. The crossroads before him were still shrouded in mist: everyone agreed that the future of retail lay in omni-channel coverage, but the question was who would get there first—traditional offline players or internet companies? At the time, physical supermarkets were seen as pitiful laggards in need of transformation, while e-commerce giants representing advanced productivity were rushing to invest offline, with ambitious plans for external equity stakes and internal incubation. But Chen believed, "Having only a model, it's hard to achieve sufficient scale in the short term. If a company of considerable size is determined to innovate from within, the chances of success are greater." He was undoubtedly in the minority. Eight years later, time has given the answer as to who dominates offline. New retail is retreating. Hema founder Hou Yi retired, and this new retail benchmark project, which tried more than a dozen business formats over eight years, awaits its fate amid rumors of a sale. RT-Mart changed its leadership, with Alibaba recalling its executive Lin Xiaohai and replacing him with Shen Hui, a former Auchan executive, in a business where Alibaba holds a 72% stake and has consolidated financials for over three years. JD.com and Meituan's new retail ventures have also transformed: JD 7Fresh once halted expansion, now with only 64 stores, far from its goal of 1,000 stores in five years; Meituan's Xiaoxiang Fresh now operates online only and has long stopped opening stores. Old retail is advancing. Sam's Club under Walmart has won big: from 2018 to 2022, Sam's contributed over 60% of Walmart China's 29 billion RMB growth. Retail insiders speculate that Sam's sales compound annual growth rate over the past three years has been no less than 30%, with 2023 sales exceeding 80 billion RMB. Per-user annual spending averages 14,000 RMB, 1.6 times that of Taobao and nearly 5 times that of Pinduoduo. It took only a few years for the conversation to shift from everyone talking about Hema to everyone talking about Sam's Club. They are certainly comparable: as of the end of last year, Hema had over 360 stores (including Hema Fresh, Hema Outlets, and X Membership Stores), with sales approaching 60 billion RMB but still loss-making; Sam's Club had 47 stores in China, with conservative sales estimates exceeding 80 billion RMB last year, and profits from membership fees alone exceeding 1 billion RMB. But in a sense, they are hard to compare. More than one Sam's employee has said that internally, they learn from Hema and JD.com about digitalization and online fulfillment, and they also recruit internet talent, but when it comes to "products," the core of retail, they look down on new retail. Sam's only real rival is Costco, another "old retail" player. A JD 7Fresh employee also lamented that new retail companies are innovative but it's a pity where they've ended up. "They're always chasing data, telling stories, proving themselves to the group to survive, but they neglect the essence of retail." And the so-called "essence of retail" lies in a common industry curiosity: why, after eight years of new retail noise, has the winner been Sam's Club, a representative of "old retail"? What is "Membership"? Before "membership" became a buzzword in the industry—over the past few years, e-commerce and new retail companies have launched various forms of "membership" businesses—Sam's Club also endured its own long dark night. Around 2004, Walmart executives pressed pause on Sam's expansion plans in China, citing insufficient membership support. Since entering China with Walmart in 1996, Sam's had opened only a pitiful 4 stores in 8 years, and had closed 1. During the same period, Walmart's hypermarket count exceeded 100. The number of stores Sam's Club has opened in China over the years and the cities it has entered. To Chinese people at the time, Sam's was as strange as an alien species: "Why do I need to pay a membership fee before I can shop?" PriceSmart, the membership warehouse pioneer that entered China the same year as Sam's, went bankrupt in 2005 due to poor management. This served as a wake-up call for Sam's. A retail veteran recalls that PriceSmart's bankruptcy directly led Walmart management to give up, and Sam's China expansion plans were completely halted for six years. According to Sam's calculations at the time, in 2000, middle-class households in Chinese cities accounted for only 4%, a stark contrast to the 55% in the US. Under such circumstances, rapid expansion would be suicide. During this period, some Sam's stores abandoned the model and transformed into hypermarkets. At the time, the boldest idea within Walmart was to abandon Sam's China business altogether and focus on hypermarkets. But this suggestion was rejected by Robson Walton, the eldest son of founder Sam Walton and former chairman of Walmart's board, who wanted to give Sam's more time. Robson Walton believed that Sam's management was sound, there was no real competitor in sight, and he was optimistic about China's consumption potential, so a temporary "rest and recuperation" was acceptable. A backdrop: entering 2010, Walmart, which had dominated Chinese retail for over a decade, was hit hard by e-commerce and entered its most turbulent and darkest period. In five years, Walmart China changed three CEOs. While the hypermarket business struggled, Sam's began to thrive with the arrival of Andrew Miles, a former Watson's executive, in 2012, marking a key turning point. This British executive, with a gentlemanly demeanor, has led Sam's China for over 11 years. "Bosses changed one after another, but he was a stabilizing force," said a former Walmart middle manager. Miles was chosen for his ability to lead retail expansion. From 2003 to 2008, as CEO of Watson's Asia, he oversaw the impressive growth of Watson's stores from 400 to 1,500. Upon joining Sam's, Miles began formulating expansion plans but found a thorny issue—Sam's employees had a vague understanding of "membership stores," with thinking deeply influenced by Walmart's hypermarket model. "Before 2010, Sam's was like a hybrid of membership and ordinary supermarkets, always eager to profit from sales," he has emphasized in media interviews. What's wrong with profiting from sales? This stems from the fundamental difference between membership stores and ordinary supermarkets. Looking at Costco's financials, a membership warehouse benchmark, reveals that in 2023, its gross margin was 10%, lower than the 15-25% of ordinary supermarkets; net profit was $5.8 billion, of which 73% came from membership fees. In other words, the key to making money in membership stores is membership fees. This has become the core metric in Sam's internal management. A Sam's store manager told me that the metrics affecting his annual bonus are membership profit (membership revenue minus acquisition costs) and operating profit, but the former carries much more weight. How to make new members willing to pay and old members willing to renew has become Sam's ultimate goal. To this end, Miles implemented two important operational reforms. Miles first cut SKUs—reducing Sam's nearly 10,000 SKUs by half. This was both to "curate" products for members and for commercial reasons. Globally, Costco maintains around 4,000 SKUs, which increases the chance of products being chosen, maintains high inventory turnover, and allows for negotiations with suppliers to keep prices low. A former Sam's employee revealed, "At the time, this move faced huge internal opposition because many lacked confidence in the membership model in China." In fact, until 2015, Sam's Shanghai store was still far from breakeven, and many internal staff thought it was close to closing. But Miles insisted. So how could Sam's actually make money? Miles' second move targeted membership fees. For the first 20 years in China, Sam's membership fee was 150 RMB, but in 2016, Miles decided to raise it to 260 RMB, where it remains today. This caused a huge public relations crisis at the time. For over a month, Sam's customer service was flooded with complaint calls, and offline stores were surrounded by customers demanding explanations. Miles explained internally, "If someone doesn't accept this number, they're not our target customer." Looking back, that was an era dominated by "consumption upgrading," and the price increase was the right choice. Its greater significance was to help Sam's filter out a group of "precise" users: urban middle-class with certain purchasing power and a pursuit of quality of life. Today, Sam's user base is a hundred times smaller than major e-commerce platforms, but per-user sales rank highest. Of course, these "surface" operational moves like reducing SKUs and raising membership fees are far from enough to explain Sam's success. In a sense, they are not the cause but the result. Comparison of Sam's China with three major e-commerce platforms in user profile, user count, and ARPU. Source: public information and financial reports. What is a "Good Product"? If you ask around the retail circle where Sam's excels most, you'll hear a strikingly consistent answer: product quality. This is worth exploring because every retail player claims to prioritize products. Amid the chorus of "do products well," what exactly sets Sam's apart? More than one Sam's insider confirms that one key to Sam's success is its "new, unique, and special" product strategy. The key driver of this strategy is Zhang Qing, who became Sam's Chief Merchandise Officer in 2017. A former Sam's employee told me that only a few categories at Sam's China rely on global supply chains, such as dry goods; most use local supply chains better suited to local consumer needs, meaning products are developed from scratch. Internally, the product department is also the most confidential and has the highest authority. A supplier once assured Zhang Qing they could double sales and profits within six months, but the products were identical to those supplied to other retail channels. Zhang Qing rejected their request to stay. "If Sam's products are the same as outside channels, why would members pay to shop here?" Internally, Sam's calls the best-selling items that members must buy "hero SKUs." They believe that if the success rate of new products is too high, it means they aren't taking risks, and thus can't create "hero SKUs" that keep members coming back. Items like the 700 RMB oversized chocolate imported from Dubai, little green lime juice, cookie gift boxes, and rainbow potato chips are all on this list. A list of some of Sam's best-selling products. "Many things at Sam's are exclusive; they actively seek out innovative products, so Sam's buyers are more R&D-oriented," said a former Sam's middle manager. "When a link in the external supply chain has too much profit, Sam's will also develop its own brand." Chief Merchandise Officer Zhang Qing also emphasizes in media self-introductions, "I prefer to be called a 'product officer'; we make products." To ensure selection is not interfered with, Sam's buyers also prefer to deal with suppliers' R&D teams rather than sales. "If a supplier comes in with a sales team talking about volume, profit, rebates, and deductions, it will likely be passed over," Zhang Qing added. She has also detailed in many forums why they make strawberries with 11 degrees Brix, jujubes weighing over 12 grams with a flesh rate over 90%, small greens that grow to a specified length within a specified number of days, and fresh meat mooncakes with the "umami" of pan-fried buns and wontons... Today, these private label products, bearing the Member's Mark label, totaling over 700 items and contributing 40% of sales, best reflect Sam's rigorous and unique product philosophy. Another core principle of Sam's product strategy is to offer the best quality at the same price point, or the lowest unit price at the same quality. Take the mochi snack as an example: many supermarkets use traditional baking methods (from raw ingredients), but Sam's insists on frozen baking, which involves making frozen mochi dough semi-finished products, then thawing and finishing them. The biggest advantage of this process is consistent texture, but the price can often be half that of room-temperature baking. After months of negotiations with multiple potential suppliers, Sam's ultimately chose Ligao Foods, a leader in the domestic frozen baking industry, as its mochi supplier. An insider revealed that Sam's had high requirements for the formula: "It must be pure vegetable oil, higher purity mochi powder and milk powder, and most importantly, no mention of product price." Ultimately, Ligao Foods accepted Sam's requirements. Tempted by the prospect of "hundreds of millions in sales," few suppliers can gain the upper hand in negotiations with Sam's, because once they cooperate with Sam's, they gain a strong endorsement of supply chain capability and a flood of cooperation partners. In 2022, Sam's purchased 700 million RMB worth of frozen baked goods from Ligao alone, accounting for 70-80% of Ligao's revenue in all KA channels. Thanks to the successful cooperation with Sam's, Ligao also expanded to new clients like Hema and Haidilao. Take another Sam's bestseller, Swiss rolls: although the price per piece is only a few cents different from other supermarkets, Sam's Swiss rolls use animal cream and ensure no artificial flavors are added to the premix; many brands use vegetable cream and add ingredients like non-dairy creamer (a milk substitute) and preservatives like potassium sorbate. The same Swiss roll, different formulas at Sam's and another supermarket. Industry insiders have revealed that if other manufacturers used the same ingredients as Sam's and maintained profit, the price would need to be at least 20-30% higher. In summary, Sam's achieves product quality and price through three methods: first, ensuring exclusive supply through buyouts and exclusive distribution; second, producing exclusive products through private label customization; third, for standard products, leveraging the scale advantage of curated SKUs to price below market average. Hema's core product strategy is actually similar to Sam's. In official statements, Hema has always insisted on differentiated supply chains, taking the route of "mid-to-high-end selection + standardized fresh produce," and at one point promoted "new, unique, and special" as an important product strategy. Hema's once-proud "new, unique, and special" product, "jingjie" (a type of herb), is a good example. This vegetable from Zhengzhou, Henan, was stocked in many Hema stores, but as a product loved by Henan locals with little recognition elsewhere, it was destined to be a niche, high-priced item, not a mass-market hit. "The essence of retail is people, goods, and places; that has never changed. New retail just upgraded people and places, but if your goods don't keep up, it still won't work," said a person who has worked at both Hema and Sam's. At this point, Sam's has returned to the essence of a membership store—continuously attracting members with "good products" that are unavailable elsewhere and offer quality at fair prices, thereby driving membership revenue growth. The Unexpected Winner in E-commerce Another huge force lifting Sam's is the explosion of e-commerce channels. Hema's original perfect business model was to use online orders to expand sales scale and support earlier store profitability. But this required online orders to be large enough (a former Hema employee said the internal critical point was "3,000 orders per day"), otherwise both stores and online would lose money. Sam's approach to online was completely different. It started as a supplement to store business but unexpectedly grew to a massive scale. In the fourth quarter of 2023, Sam's China online orders accounted for over 50%. According to industry estimates, Sam's online annual sales last year approached 40 billion RMB, far exceeding Dingdong Maicai's 22 billion, Pupu Supermarket's 26 billion, and Meituan Maicai's less than 30 billion. This means that in the brutal competition of "self-operated fresh produce instant delivery," where companies big and small have burned enormous cash, Sam's has emerged as the ultimate winner. Looking back, it all makes sense. Sam's high online average order value covers the high cost of instant delivery; customer acquisition costs are low because they share a membership base with offline, which is loyal and repeats purchases—the problems that plagued other players have been perfectly solved by Sam's. In fact, for a long time, Sam's was cautious about directing users online, and the online shopping experience was poor. A former Sam's e-commerce team member vaguely remembers that when they joined in 2021, searching on the Sam's app yielded nothing. "The entire interface was full of content, almost no products. How could users place orders?" In 2020, Zhu Xiaojing, the new head of Walmart China, took office. With a strategy background, she began to fully promote omni-channel transformation. The pandemic made this strategy more urgent. But how to do e-commerce, Sam's was also feeling its way. A major disagreement at the time was whether to put all 4,000+ SKUs online or only select 1,000+ SKUs. Sam's China President Andrew Miles insisted on only 1,000 best-selling SKUs online while protecting the offline experience. Ultimately, Sam's respected Miles' advice. Sam's had two e-commerce executives, both from Alibaba. One was Chen Zhiyu, mentioned at the beginning of this article, who built Sam's front-warehouse system from scratch; the other was Li Daming, who led the optimization of the user-side e-commerce experience. Around 2021, Sam's e-commerce team reached 60-70 people, most of whom came from internet companies like Alibaba, Hema, and Dingdong Maicai. Sam's paid these people salaries higher than its own pay scale, and they brought a rare overtime culture, both of which caused some dissatisfaction among old employees. But the determination of top management was firm. In the second half of 2021, the newly formed e-commerce team spent the entire time optimizing the Sam's app user experience, from product structure to search logic to fulfillment chain, changing everything. Sam's, which almost never does promotions, also participated in Double 11 that year for the first time, reasoning that "if users complete their 'stockpiling' on other e-commerce platforms, they will reduce stockpiling at Sam's." The pandemic also deeply reshaped consumer psychology and habits: urban middle-class families prefer stockpiling, online shopping, and allocate more budget to "essential" food and drink. By the end of 2021, Sam's online sales share and GMV began to increase rapidly. Tasting success, Sam's China leadership elevated online business to a higher strategic level—2023 became Sam's "omni-channel year." Today, 47 stores and front-warehouse delivery networks across 23 Chinese cities form Sam's business map. Compared to stores, online business is considered a more difficult moat against Costco. At this point, Sam's China has completed two difficult transformations: making the "product" strength long enough, and quietly filling the "e-commerce" weakness. It finally had its moment to soar, but new and old rivals also appeared. Fake Enemies and Real Rivals Hema founder Hou Yi openly admits that if there is one retailer worth learning from, it's Sam's Club. Their strategy is to learn while also engaging in marketing battles. This was a "price war" that shook the retail circle. It started in August last year when Hema launched a 99 RMB durian thousand-layer cake, and a Shanghai Sam's store quickly lowered the same product from 128 to 98.9 RMB. Hema then dropped to 89, Sam's adjusted to 1 RMB lower than Hema, and finally Hema dropped to 79, while the Sam's store dropped to 85. Sam's follow-up was quickly noticed by Hema, which seized the opportunity to launch a high-profile "Move Mountain Price" campaign in 13 cities, targeting Sam's in both products and publicity. A Sam's insider told me that this price war was not the will of headquarters but a temporary decision by a Shanghai store manager, "because competition in Shanghai was too fierce, and he got carried away." The price cuts lasted less than a week before being severely stopped by upper management, and the store manager was persuaded to leave at the end of the year. Sam's store managers do have the authority to adjust prices within a certain range (e.g., meeting gross margin requirements), "but he forgot that Sam's is a membership model, and dynamic promotions violate Sam's biggest taboo," the employee explained. Of course, being caught by Hema and making a big deal out of it made the "mistake" even more unforgivable. Walmart China CEO Zhu Xiaojing has publicly explained "why Sam's doesn't do promotions," "because every promotion adds complexity to the business model, and every complexity adds cost, which ultimately passes on to members." Sam's President Andrew Miles has also spoken about the "discipline" of membership stores: "We don't pay much attention to store design, fancy shelves, lighting, or complex promotion models; we care more about a stable price system." There are many other details that reflect the different understanding of retail between Sam's and Hema. A store manager who worked at both Hema and Sam's gave an example: facing the common "shrinkage" problem in fresh produce, Hema's solution is to "discount based on the proportion of shrinkage," while Sam's chooses to include shrinkage directly in costs but never discounts. "Discounting indicates the product isn't good; I can't sell that to members." Another former Sam's employee said that when they internally calculated the cost of Hema's "Move Mountain Price" featured products, the conclusion was "definitely losing money." Loss-leading items are tolerated in the internet world, but Sam's won't do that; their principle is to ensure profit even if it's thin. In response to the downward consumption environment and the "price war" competition, old and new retail have made different choices. In 2023, Sam's invested 1 billion RMB to permanently lower prices on its best-selling items. The best-selling laundry scent booster (regular size) was reduced from 89 to 79 RMB; one of Sam's highest repurchase items, Member's Mark egg yolk pastry, was reduced from 49.8 to 42.8 RMB. It's understood that this investment will increase this year, but Sam's product base has not changed. Hema, on the other hand, began a bold strategic transformation. Hema's Chief Merchandise Officer Zhao Jiayu mentioned at a supplier conference at the end of 2022 that more and more users are price-conscious, even the most novelty-seeking young people: "They are no longer willing to pay a high premium to experience new things, but use low prices to try new products." Hema subsequently announced a transformation to discount stores, redoing products and supply chains, which is undoubtedly extremely difficult and a matter of life and death (in Hou Yi's words). Defining rivals is also defining oneself. More than one Sam's employee said that internally, they learn from Hema how to do digitalization and online fulfillment. But when it comes to products, Sam's only real rival is Costco. Since Costco entered China, Sam's has established a "competitor group" whose main job is to track Costco's store operations comprehensively, including products, supply chains, membership, services, and sales data. This group consists of 8-10 people, usually centered on stores, divided into headquarters functional and store operations teams. According to industry norms for membership stores, all product prices are strictly confidential before a new store opens, only revealed at 4 a.m. on opening day. To probe Costco's promotional intensity at its Shenzhen Longhua store, Sam's competitor group went to great lengths, inquiring from suppliers to internal employees. When they discovered that Costco planned to continue relying on traditional bestsellers like Moutai, Burberry, and Samsonite luggage to attract members, they quickly reported this to upper management. A few days later, people were surprised to find that Sam's two Shenzhen stores also launched Samsonite suitcases, directly cutting the price from 1,180 to 769 RMB. To divert traffic from Costco's Longhua store, Sam's even covered the Shenzhen Metro Hongshan Station, the closest station to Costco, with ads half a month in advance. A Shenzhen resident told me that in Sam's 28 years in Shenzhen, they had never seen such a scene, "reminiscent of the early e-commerce giants' Double 11 battles." During the first week of Costco's Shenzhen store opening, Costco China General Manager Zhang Shuyun and her entourage frequently appeared in Sam's Shenzhen stores, "photographing products and prices, circling around again and again." Their behavior was so conspicuous that Sam's store staff repeatedly stopped them. This kind of probing is very similar to the early days of Sam's Club. In his autobiography "Made in America," Sam Walton recalls that to manage stores well, he spent a long time wandering around a large PriceSmart membership store on Marino Avenue in San Diego, carrying a small tape recorder—as usual—to record competitors' thoughts on prices and sales. Although he was eventually caught by staff, he got the information he wanted. "I don't want our competitors to feel too comfortable, thinking they can predict our moves," Sam Walton said. "Constant change is necessary to prevent people from becoming complacent and unambitious." To date, Sam's Club, after 28 years in China, has 47 stores, while Costco, after 5 years, has only 6 stores, but the latter's global influence still makes Sam's vigilant. Sam's China's aggressive posture in recent years has been greatly stimulated by Costco's entry. Lin Xi, a Sam's Shanghai employee, still remembers the crowds at Costco's first store in Minhang in 2019. "Sam's has been cultivating China for 28 years and may never have seen such a scene." A retail insider commented on "Sam's recent store opening speed," saying, "It doesn't want outsiders to laugh at it for having been in China so long and still needing Costco to help open the market." But at least for now, the arrival of the catfish Costco has not affected Sam's performance. A Sam's employee told me that since Costco's Minhang store opened, Sam's Shanghai stores' membership numbers have increased almost every year. "Every time Costco opens a store, Sam's nearby stores' revenue and membership numbers grow by an average of 25%." "Costco, as the king of membership stores, is bigger and stronger globally, but because Sam's has been cultivating China for 28 years and understands Chinese consumers better, Costco has only been in China for 3 years and can't shake it in the short term," a retail industry insider commented. What is Retail? During the bleakest days of Walmart China's hypermarket business, there were rumors of selling out. An insider told me that the potential buyer wanted to include Sam's in the discussion, but Walmart flatly refused. Shortly after the talks broke down, Sam's got the pandemic dividend. From 2018 to 2022, Sam's contributed over 60% of Walmart China's 29 billion RMB growth. By 2022, the revenue ratio of Sam's Club to Walmart hypermarkets in China had reached 1.65:1. This is a striking fact: like two generations of products from the same company, Walmart hypermarkets and Sam's Club succeeded in China 20 years apart. In China's innovation-active business world, making a comeback after more than a decade of silence may be more challenging than leading for a few years. In 1983, Walmart founder Sam Walton met Sol Price, the inventor of the "membership store," in San Diego, and the two retail masters had a family dinner with their wives. Shortly after, the first Sam's Club opened in Oklahoma City in the south-central US. "I had the opportunity to start a company from scratch again," old Sam said in his memoir. The soul and temperament of this company can certainly be traced back to founder Sam Walton. He had at least three habits that are still deeply ingrained in Walmart people: first, frequent and extensive store visits; second, creating a culture that fully mobilizes people's passion; third, plain style and frugal living. "I was always inspecting stores then, and I still do. We've seen stores all over the world and got some great ideas that way," Sam Walton wrote in his memoir. His three sons and one daughter all have memories of family trips across the country where their father would take time to inspect stores. "Stores were part of our lives." When Walmart Global CEO Doug McMillon visited China a few years ago, someone noticed he was wearing a unique pair of shoes—leather on the surface but with rubber soles like sneakers. He explained they were custom-made, "so I can attend business occasions and also walk tens of thousands of steps in stores." Sam's CEO Andrew Miles also often speaks Mandarin in stores, asking for suggestions on Sam's products and services. Once a member told him that a product had "such large packaging but a short shelf life," so it shouldn't be sold. The suggestion was immediately adopted. In the US, Walmart's "Saturday Morning Meeting" system has been passed down to this day because old Sam believed that "to succeed in retail, you must work on Saturdays." One of his old subordinates commented: "He knew when to make the atmosphere serious and when to liven it up. Sometimes meetings were democratic, sometimes very autocratic. But he always held meetings for three purposes: to exchange information, solve problems, and unite the team." An important part of the Saturday morning meeting is hundreds or thousands of people shouting the "Walmart Cheer" together. In China, the company is also familiar with this cheer (and Sam's cheer). A Walmart employee recalled their initial embarrassment and shock upon joining. At the largest hall of the Shenzhen Convention and Exhibition Center, a 3,000-person Walmart annual meeting started at 7 a.m. Employee representatives from various Walmart and Sam's regions entered one by one, shouting their cheers. "Drums and gongs, see who has the loudest voice and the strongest momentum. Executives also shout." At first, he wasn't used to it, but later understood it was necessary for a strong operations company. The "frugal billionaire" is a well-known story widely reported by American media. Sam Walton's entrepreneurial career began in the 1950s and 1960s when the US economy was recovering, but he grew up during the Great Depression, "knowing the value of every dollar since childhood." He drove a pickup truck for bird hunting and dogs, got haircuts at the town barber, and practiced frugality in managing the company. After three generations, this tradition has not disappeared. A former Walmart China middle manager told me that even if Walmart headquarters executives have luxury cars, they only dare to drive affordable Japanese cars or American Fords to work. There was an executive who carried a luxury bag to internal meetings, "although not criticized, it seemed out of place." At Shenzhen Futian Yinde Building, Walmart China's CEO and executives do not have their own private offices. "Every dollar Walmart wastes makes our customers spend a dollar more. And every time we help customers save a dollar, we gain a step ahead in competition." This is old Sam's motto and the truth of retail. Especially today. One day at the end of March 2018, Walmart Global CEO Doug McMillon gave an environmental-themed speech at Tsinghua University and accepted media interviews. Rather than environmental protection, questioners were more interested in how this key figure in retail viewed China's booming new retail entrepreneurship. To some extent, he was an excellent spokesperson for "old retail." The conversation did not spark as expected. McMillon only listed Walmart's many "technological innovations" and then humbly said, "I think for retail veterans, new concepts emerge endlessly, but retail ultimately boils down to price, products, and experience—the more things change, the more they stay the same." Looking back, this was a meaningful answer. The era of internet capital with abundant funds and bold cross-industry moves is over. A company that deeply understands "depression" and focuses on doing one thing well may be better able to dance with this era. Recommended Reading