Over the past three years, Walmart China has accelerated its transformation of hypermarkets. Days before the 2025 New Year, its 'next-generation stores' in Kunming, Yunnan—Longquan and Zhengda—officially debuted. 'Not confined to the hypermarket format, restart growth, and reshape the Walmart brand.' Zhu Jun, Walmart's chief merchandising officer for stores, told the author, the next-generation stores are a concentrated embodiment of Walmart's transformation strategy in recent years. In the year following the completion of the first batch of 29 hypermarket upgrades across 8 cities at the end of 2023, Walmart China further reorganized and repositioned its hypermarket strategy. If you visited the 'renovated' Beijing Xuanwumen store in early 2024 and then toured the two new Kunming stores at year-end, everyone would feel that this global retail giant, apart from keeping 'customer first' unchanged, is 'rebirthing' the traditional hypermarket and pushing the current wave of supermarket 'adjustments' in China to a new height.
Starting Point of Reshaping: More Focused 'People' In Zhu Jun's view, the strategic origin of 'customer first' is the starting point for the reconstruction of Walmart's next-generation stores. 'Based on the characteristics of the target group, we respond to what they need.' To understand Walmart's next-generation stores, the core is to understand its redefined target audience—which guides the precise reshaping of 'merchandise' and 'place.' Walmart's next-generation stores have shifted their target audience from the broader middle-class demographic that sought one-stop shopping in hypermarkets decades ago to a clear focus on: 'mass-market middle-class small families.' They are digital natives, busy with life, and have high-frequency dining needs. This audience consists of urban small families or singles, younger, value-conscious but also quality-oriented, seeking a better life, buying branded goods, and placing high importance on healthy living and clean-label food. More precisely, Walmart's next-generation stores are the first in the industry to make a clearer choice about their target customers, breaking the past 'stereotype' of serving the general public. This 'focus' enables more precise and targeted development of new products and experiences, building trust and repeat purchases. The product sizes are visibly 'smaller.' Previously common large packages, such as 10kg rice, are now mainly 5kg, with smaller packages like 2.5kg added. Newly added areas such as fresh-cut fruit, Western-style food bars, quick meals, and marinated deli, as well as everyday convenient meals like one-sauce dishes and single-serving soups, attempt to more fully and meticulously meet the fast-paced, small-portion, and diverse meal needs of small families. Image source: Retail Kr Planet. Walmart's private brand 'Wo Ji Xian' bakery offers over 30 types of 9.9 yuan bread and cakes, small in size, fresh and affordable, extremely friendly to small families and singles. 'Richer 'value' than mere low prices is another logic.' After visiting Walmart's next-generation stores, an industry insider told the author. He was impressed by a four-flavor boxed cream cake: 100% animal cream, containing strawberry, Lipu taro, Oreo, and milk flavors, 'higher quality and clearly labeled as 'small family sharing size.'' Image source: Walmart official website. With simultaneous offline and online iteration, and understanding the busy pace of middle-class small families, Walmart is also 'expanding the circle' based on store-to-home delivery, improving omni-channel, so the target audience can shop anytime, anywhere in their preferred way. Walmart's e-commerce now accounts for nearly 50% of sales. In the view of Zhu Xiaojing, President and CEO of Walmart China, 'On Walmart's transformation path, 'customer first' is the unchanging strategic origin. We will focus on customers, return to their real and precise needs, continuously drive product strength and omni-channel development, and create value continuously, thereby winning their long-term trust.' Providing precise services for targeted groups aligns with some scholars' judgments about the future positioning of supermarkets. Professor Chen Liping from Capital University of Economics and Business holds that 'with demographic changes, an业态 that satisfies all middle-class consumers is impossible.'
Merchandise: Spend Less, Live Better Zhu Jun revealed that achieving 'spend less, live better' for customers is the goal of Walmart's store reshaping. The three major directions of Walmart's merchandise transformation are: providing high-quality, convenient one-day meal solutions; creating big-brand, low-price Walmart-exclusive products; and developing unique, surprising treasure products. That is, 'spend less.' Image source: Retail Kr Planet. In Walmart's next-generation stores, 9.9 yuan price tags are visible everywhere. Zhu Jun emphasized, 'When our prices are already competitive in the market, as a retailer we might stop there, but if we think from the customer's perspective and still find it expensive, we will continue to look for cost optimization opportunities.' More critically, Walmart's EDLP (Every Day Low Prices) philosophy, proposed in 1974, is highlighted and strengthened in the next-generation stores. On Walmart's mini-program, the previously common promotional coupons are gone, and everyday low prices have become the norm. A typical example: a 19.9 yuan pack of 30 eggs has not changed price for 13 months. Image source: Retail Kr Planet. A Walmart insider told the author, 'This is a very big change.' In the future, Walmart China will abandon promotions and reliance on short-term profits, 'building customer trust through simple, transparent prices and using this to build long-term development momentum.' In Zhu Jun's view, EDLP is not a simple pricing strategy but the core of Walmart's model. And 'live better,' in summary, is Walmart's effort to improve quality and healthiness in product supply, leveraging its global supply chain advantages to provide better supply and selection, based on the rational consumption of middle-class small families who value cost-performance but also pursue quality of life. Zhu Jun explained, 'In product refinement, we emphasize quality-price ratio; high quality, clean ingredients, uniqueness, value, and practicality are our development criteria.' Walmart's private brand 'Wo Ji Xian' bakery underwent a comprehensive quality upgrade in 2024, using freshly baked and 100% animal cream to improve taste and quality, and promising never to use sodium dehydroacetate. Furthermore, in developing new products, Walmart's procurement team even goes down to specific scenarios and packaging materials. For example, all stores use pre-packaged vegetables for faster home-delivery picking, and the number of holes on the bags is specially considered and designed for freshness in different scenarios. Image source: Walmart official website. In stores, the variety and new product rate of frozen seafood have significantly increased. At the Kunming Longquan store, seafood from high-quality global origins such as Pacific Dungeness crab, Arabian Sea razor clams, Beibu Gulf mantis shrimp, and Fujian Lianjiang 6-head abalone are highly attractive to Kunming residents in this inland city. Imported Angus beef is sourced by Walmart from Australian beef factories, kept at 0-4 degrees Celsius cold chain and arriving daily at port; its cold-chain original-cut beef hind leg is only 35.99 yuan per 500 grams. Clearly, Walmart is striving to highlight its global supply chain resource advantages, allowing middle-class small families to enjoy consumption upgrades while making its fresh category more appealing through cost-performance, emphasizing 'only Walmart has it.' Image source: Retail Kr Planet. In general merchandise, Walmart also uses 'curation' to amplify its global supply chain advantages and let consumers appreciate its differentiated product strength. For example, Clinique's 125ml oil-free lotion is 298 yuan on the official website, but Walmart sells it for 139.9 yuan. In apparel, Walmart does not use its own brand but has discussed with major apparel brands a year in advance to introduce nearly a hundred customized styles, including Under Armour, Gap, NAUTICA, Nike, Adidas, and Reebok Walmart-exclusive low-price products, as well as limited items like giant Strawberry Bear plush toys and American Tourister luggage sets, meeting the middle class's pursuit of quality and the surprise of treasure hunting. 'It feels more textured,' a manager of a domestic supermarket told the author after studying Walmart's latest stores. The intensity of this iteration is surprising, and the store's texture comes from 'curation as the basis, and a certain selection system, not hard decoration.'
Place: More Shopper-Friendly, Surprising, and Omni-Channel In Walmart's next-generation stores, a notable upgrade different from the past industrial-style hypermarkets is that many products are displayed and sold by consumption scenarios. In 16 zones—including breakfast, hotpot and BBQ, outdoor travel, pets, fresh food, and global shopping—cross-category products are cross-merchandised by scenario. Image source: Walmart official website. These zones vividly replicate real-life scenarios, breaking away from the industrial feel of tall shelves, and combined with over 20 tasting points added in the store, they create more liveliness, interactive experience, and human touch. In Zhu Jun's view, 'the hardest part is the change in mindset,' which is a fundamental shift in stance and perspective. Scenario-based layout is a reconstruction of the store from the customer's perspective, rather than the category management that retailers are accustomed to. This means Walmart's operations and procurement teams must step out of their comfort zones and reshape organizational work methods and assessment mechanisms. The high demand of young family consumers for aesthetics and walkability is also addressed in Walmart's next-generation stores. The removal of main aisle displays, lower open shelves, simple and bright, more transparent stores, and more product educational information in product areas—such as fragrance usage tips, how to ensure frozen seafood quality, and how to season a wok—make shopping fun and interactive. 'Products that are fully expressed are easier to sell.' Additionally, in this wave of domestic supermarket adjustments, reducing area and streamlining SKUs is the choice of most supermarkets. But for Walmart, the next-generation stores do not yet have a clear area limit; they are not constrained by size but based on consumer needs. At the same time, product streamlining maintains around 10,000 SKUs. People still have a rich selection at Walmart, clearly distinguishing it from limited-assortment discount stores or membership clubs. Walmart's next-generation stores place more emphasis on the surprise of products and tasting experiences, serve as e-commerce fulfillment centers, and continuously improve operational efficiency and organic integration of omni-channel.
Determination and Unchanged Continuously improving operational efficiency is also an unchanged core of Walmart's next-generation stores. Before the 2025 Spring Festival, 60 Walmart China stores will replace paper labels with electronic shelf labels, and subsequently, all stores will gradually adopt them, reducing trivial operational tasks for staff. In terms of products, similar to streamlining snacks and price bands, the one-sauce dish series and various red envelope products with uniform pricing speed up consumer decision-making and greatly improve home-delivery picking efficiency. Image source: Retail Kr Planet. The increased use of PDQ (cut-case) packaging in stores makes products more visible to consumers and greatly improves restocking efficiency. Everyday low prices free up procurement teams to focus more on trend insights and product refinement rather than daily promotions... How to respond to changes in people's lifestyles? What kind of supermarket will people need in the next decade? In the current challenging environment, it is 'people'—consumers whose lifestyles are changing rapidly, becoming more rational, cautious, and with more diverse needs—that are triggering a comprehensive upgrade of the domestic supermarket industry. Grasp the underlying logic of this wave of upgrades, and you will understand Walmart's 'radical makeover.' The key to Walmart's 'radical makeover' of next-generation stores is actually the focus on target consumers. With 'people' as the origin, subtly observe their changes and characteristics, then precisely refine merchandise and place, operate efficiently, and persist, and you will build continuous trust and repeat purchases from this group. Anchor on a specific group, then wholeheartedly stand in their shoes to think about and implement the business. Of course, the hardest part is making the choice of which groups to serve, the basic skills and firm perseverance to implement, and bearing the costs of doing so.
【New Order · Symbiosis】 ****The 10th China FMCG Innovation Conference Time: March 17-19, 2025 Location: Chengdu, China