Source丨Retail Circle Zulong Besides hypermarkets and Sam's Club, Walmart has begun testing 500-square-meter small stores, a move netizens have jokingly called Walmart 'learning from' ALDI. One is Walmart, a retail giant that has been on the Fortune Global 500 for nine consecutive years; the other is ALDI, a German retail giant known as the 'discount originator'. Unexpectedly, both are targeting 'small-format' supermarkets in China. Global store king Walmart's 'small' thinking** Testing 500-square-meter small stores, exploring a third growth curve Globally, Walmart's dominance is unshakable. Sam's Club's revenue in China accounts for two-thirds of Walmart China's total, making it a rare exception globally. Sam's Club's online sales in China, based on front warehouses, account for over 50%, which is also an exception among exceptions worldwide. No one would have thought that after the 'failure' of Yihaodian, a different localized 'e-commerce' path could be explored, which also prevents global warehouse club Costco from competing with Sam's Club in mainland China. This shows Walmart's success in its localized strategic route in China. Today, with hypermarket growth sluggish, Walmart China has surpassed China Resources Vanguard, RT-Mart, and Yonghui to return to the top of China's supermarket chain rankings, thanks to its forward-looking strategic layout. Sam's Club's 100 billion yuan in sales has single-handedly secured the top spot in China's supermarket rankings. Just like Sam's Club, which was lukewarm during the hypermarket era, Walmart China is now thinking about its new growth curve and has ultimately set its sights on 'small-format' supermarkets. Last month, Walmart's community small store at Nanshan Xinde Jiayuan opened grandly, with an area of about 500 square meters. This is the second community small store opened in Shenzhen. In January this year, Walmart's first community small store at Longhua Yicheng Center opened. The overall positioning of the project is 'Your New Neighbor', focusing on the 'Everyday Low Price' strategy, with a 'front warehouse + cloud store' model. The author previously reported that Walmart tried the community store small store model in 2018: Walmart's 'Huixuan' supermarket, compared to the current community small stores, had an area about twice the current size, roughly 1,000-1,200 square meters, and had opened about 20-30 stores in Guangzhou, Shenzhen, Dongguan, etc., but it didn't last long and eventually fizzled out. This time, Walmart's community small stores have core characteristics: First, the area has shrunk to about 500 square meters, much smaller than before, directly resulting in lower rent, labor costs, and inventory pressure. Second, the integration of 'front warehouse + cloud store' dual models is core, achieving real-time synchronization of online and offline inventory. When a community small store is out of stock, the system automatically jumps to nearby large stores or Sam's cloud warehouses for replenishment, realizing real-time product sharing. This model benefits from Sam's Club's 'cloud warehouse' model. Sam's, through nearly 500 front warehouses, with an average daily order volume of 1,000, has increased its online sales proportion to over 50%. The integration of store and warehouse may be replicated and coordinated across Walmart's KA hypermarkets, Sam's Club, and Walmart community small stores. In terms of products, freshly baked goods and fresh food are made in transparent kitchens, basically from Walmart's own brand 'Wo Ji Xian', focusing on freshness and selling out the same day. In terms of imported and private label products, imported items such as Mexican avocado oil and Greek juice have been introduced, with the private label 'Wo Ji Xian' accounting for 30%. Regular products include fruits, vegetables, meats, and organic foods, as well as chilled pork, chilled beef, chilled poultry, and chilled seafood, refrigerated milk, quick Western meals, frozen dumplings, ice cream, zongzi, quick-cook dishes, barbecue, frozen steak, etc., displayed in dedicated counters, as well as a Wo Ji Xian ice cream counter. In addition, there are some scenario-based experiences: for example, the Walmart Garden, with flowers directly supplied from Kunming, a health care area with free consultations from Penguin Doctor, and a children's play area. To some extent, the store format positioning and product structure are infinitely close to ALDI, and the front warehouse + cloud store may be the biggest advantage and difference. Discount originator ALDI's 'small' persistence Creating a Chinese 'small-format' supermarket model As a German retail giant, ALDI is known in the industry as the 'poor man's supermarket' and 'discount originator'. After arriving in China, it has become a model of foreign retail after Sam's Club and Costco. It is called a 'beautiful supermarket' by Pang Donglai founder Yu Donglai, who said its products are 'so quality, affordable, and warm'. Originating in Essen, Germany in 1913, ALDI, as a globally renowned German retail enterprise, has developed for over a hundred years and now has more than 10,000 stores in over 10 countries worldwide, becoming a well-known and recognized retail brand in the international market, and a pioneer in discount supermarkets and private labels. In the 'Global Retail 50' list released by the National Retail Federation (NRF) in 2024, ALDI ranked fourth, ahead of Costco, Carrefour, and Metro. In 2017, ALDI entered mainland China through Tmall Global. After two years of trial, the first batch of pilot stores opened in Shanghai in June 2019. ALDI has continued to deepen its presence in the Chinese market, always committed to providing consumers with high-quality products that combine international quality with community prices. As of the first quarter, ALDI has 65 stores in Shanghai, covering nearly all administrative districts. After more than five years of development, ALDI left Shanghai this year to focus on the Yangtze River Delta. The first two stores in Jiangsu opened on April 19, 2025, in Suzhou Fangzhou Neighborhood Center and Wuxi Yuanrong Plaza. The ALDI store that opened in Kunshan on May 10 once again caused a stir in the industry. The Kunshan first store continues ALDI's core strategies of 'no membership fee' and 'small packaging, low price', and further pushes the concept of 'high quality-price ratio' to new heights through a product matrix with private labels accounting for over 90%, efficient operation models, and deeply localized supply chains. From Shanghai to Jiangsu, ALDI is attracting attention in the Yangtze River Delta consumer market with a rhythm of 'one city, one hit'. Using private labels as a spear and fresh food quality as a shield, through extreme efficiency and deep localization, it has broken through in a consumer market where price sensitivity and quality pursuit coexist, becoming a key prelude to ALDI's national expansion. To better reduce costs at the source and pass on benefits to consumers, ALDI has inherited its German DNA, developing 13 private labels and significantly increasing the proportion of private label products to an astonishing over 90%. To date, ALDI, through professionalism, effort, and deep cooperation with suppliers, has carefully created nearly 2,000 private label products, and this differentiated 'private label' strategy has become its core competitiveness distinguishing it from other brands. In addition to private labels, 'good quality, low price' has become an important business strategy. Last year, after ALDI's 9.9 yuan private label liquor became a hit, it once again extended the price war to all categories. According to reports, ALDI increased the number of products priced at 9.9 yuan or below to over 500, accounting for a quarter of the store's SKUs. Of course, low price is just a strategy; the soul lies in operational efficiency and quality assurance under high turnover. ALDI China Managing Director Roman Rasinger once responded in an interview to the frequent 'price wars' launched by supermarkets at the time: Low price is a result, not a strategy. The real competitiveness lies in the precisely calculated sell-through behind the shelves, the repeatedly refined product specifications, and the accurately estimated turnover costs. ALDI, Hema, Walmart: A Three-Way Battle A retail efficiency revolution for the last kilometer Why have Hema, the vanguard of local Chinese retail, Walmart, the leader of global retail, and ALDI, the global discount originator, all focused on 'small-format' community supermarkets? Why China again? This may be a question retail practitioners should consider. At the end of 2024, Hema CEO Yan Xiaolei announced the company's future strategic layout in an internal letter, clearly focusing on two core formats: Hema Fresh and Hema NB. Hema Fresh, as the main force, is accelerating its layout in third- and fourth-tier cities, going down to some affluent county-level cities, and last year it expanded at a rate of one store every five days, steadily capturing market share. Hema NB, in the form of community discount stores, is opening up franchising, focusing on a 'offline store + self-pickup point' model, accelerating coverage of lower-tier markets. The two complement each other, continuously expanding Hema's scale and advantages. This reform has been effective. Hema has achieved overall profitability for nine consecutive months, and Hema NB, as a representative of small formats, has become one of the 'only two' brands that have survived from Hema's more than a dozen formats. ALDI's successful localization of small formats has been detailed above and will not be repeated. Walmart's possibility of making 'small-format' community stores a third growth curve beyond KA hypermarkets and Sam's Club is an extremely rare strategic layout globally. Sam's success with 'front warehouses' has become an important support for its business model in China, increasing the online proportion to 50%, giving Walmart China new confidence to try new formats. Why is everyone focusing on 500-square-meter small-format supermarkets? In terms of cost, small stores have higher operating costs; in terms of service radius, small formats have more precise coverage; in terms of products, small formats have faster sell-through. When e-commerce and new retail focus on 3-kilometer, 30-minute delivery to home, 300-meter, 5-minute store visits may become a new consumer demand. Mr. Jing Yan, who has 31 years of retail experience, told the author that many industry insiders say Walmart's opening of community stores is 'learning from' ALDI. These two international retail giants each have their strengths, but ALDI's insight into China's customer composition and buying habits, which are completely different from Europe and America, such as fewer children, an aging customer base, fast-paced lifestyles, and daily necessities purchasing habits, is ahead of Walmart. Personally, whether it's 'learning from' or 'learning', Walmart's attitude of putting down its big-shot airs and traditional arrogance to learn humbly is very worthy of learning for many enterprises. Going deep into communities, using a layout that satisfies and adapts to Chinese consumers' habit of buying frequently and in small quantities, is more in line with the shopping habits of a large portion of consumers. Community stores meet general daily needs, and some products are delivered from Sam's Club via third-party platforms, making community stores a forward support point for Sam's to penetrate communities. It can be said to be the best solution to solve the last few hundred meters between customers and stores. Smaller product packaging meets the on-demand purchasing needs of Chinese families with fewer members. Walmart's ability to do this is also a practical change based on customer research. Regarding the trend of major e-commerce platforms like JD Seven Fresh and Freshippo (Xiaoxiang Supermarket) seizing community commerce, the hypermarket format will become a thing of the past, and the 500-meter business circle and delivery-to-home services will become new retail directions in the coming years. Walmart's layout is also a measure to gain a relatively leading position in the new trend. Overall, whether it's Walmart, Hema, or ALDI, if we must give retail three keywords, the author believes they are quality, efficiency, and cost. Quality is the basic guarantee for consumers and the lifeline for operators. Operations without quality will ultimately be short-lived and cannot withstand the test of time. Cost is the lifeline for operators' development and a key factor in a product's quality-price ratio. We often say retail is about bending down to pick up coins; reducing costs is the main source of profit and the key to passing on benefits to consumers. Efficiency is the common pursuit of consumers and operators. Operators need to improve efficiency to optimize organizational agility and operational efficiency, and for Generation Z consumers, shopping efficiency has become a key factor in their purchasing decisions.