Walmart Opens a New Track
As pandemic prevention policies are gradually relaxed, the market expects the consumer sector to recover. In the second half of the year, leaving behind past pessimism, the performance of major supermarkets and retail has gradually rebounded. Looking back over the past three years, retail enterprises have been under the shadow of the pandemic. Many supermarkets and hypermarkets have adjusted and made numerous transformation attempts, such as exploring from large stores to small community stores, and then launching store-to-home, retail-plus-dining models. However, so far, these transformation practices, though effective to some extent, have not fully resolved the "difficulties" and declining performance faced by the current supermarket format. Turning an elephant around is never simple. The transformation of retail formats requires systematic thinking, learning to adjust quickly in adverse environments, leveraging broader industry resources, and serving consumers with quality products. Whether it is domestic or foreign supermarkets, or internet giants, the only breakthrough to meet consumer needs is to return to the core of retail—merchandise and service. The key weapon to attract customers is whether there is sufficient product strength, and to find new transformation directions from the focus on product adjustment. As Zhu Xiaojing, President and CEO of Walmart China, said, "In a downward and slowing market, there are still huge opportunities, and this opportunity precisely comes from the dramatic changes in the market. In an economic downturn, consumer behavior and psychology change. It is such significant turbulence and change that create space for innovation and opportunities for enterprises to overtake on curves and accelerate development."
Hypermarket businesses are all talking about upgrading and transformation, but each has its own approach. Carrefour has chosen to lay out membership stores, while Yonghui is committed to digital economy transformation. For Walmart, the direction seems clearer: focus on community customers, serve them with more streamlined and sharper product strength, and thus win the existing market. In the past two years, the market has felt that Walmart hypermarkets have been more actively reforming product strength, with greater intensity and boldness. Recently, Walmart hypermarkets officially launched the "Signature Dishes from Famous Southern and Northern Restaurants" (prepared dishes), focusing on urban family consumption scenarios. Partnering with nearly 20 well-known domestic catering companies, they introduced over 70 signature dishes and proposed the concept of a "complete meal solution," which is refreshing. Unlike the current prepared dish market, Walmart does not emphasize "convenience" but focuses on "quality," "authentic taste," and "affordable prices" that families care about more. The new idea of a "complete meal solution" breaks the inherent perception of prepared dishes in the market. Especially for family banquet scenarios, such as the Spring Festival, consumers can enjoy trustworthy and delicious signature dishes from famous restaurants, bringing together delicacies from all over the country on one table, with obvious price advantages. In Walmart stores, Songhelou's noodle box is 16.9 yuan, and buying 5 boxes starts at 9.68 yuan per box; Tao Tao Ju's yellow millet glutinous rice balls are 9.9 yuan for 10, with an additional 10% discount for two items. This is Walmart leveraging its efficient supply chain advantages, perfectly matching sales and production scale, achieving cost savings through scale, and ultimately returning them to consumers.
Walmart's intention is clear: find differentiated opportunities in existing consumption scenarios, open new tracks, and systematically develop a batch of high-quality, high-value new products. This reflects Walmart's determination to reform product strength and meet the increasingly discerning needs of customers for quality and value. For Walmart, the "Signature Dishes from Famous Southern and Northern Restaurants" series is a new track that refreshes the market's perception of prepared dishes. With quality and price advantages, Walmart continues to broaden and deepen its existing market.
Three Capabilities Support Walmart in Refreshing Perceptions of Prepared Dishes
Driven by factors such as the "lazy economy" and staying home during the pandemic, prepared dishes have become increasingly popular in recent years. According to the "2021-2022 China Prepared Dishes Industry Development Report" by NCBD (Canbao Dian), the market size of China's prepared dishes exceeded 300 billion yuan in 2021, and it is expected to surpass 830 billion yuan by 2025. Compared to the capital market's enthusiasm for the prepared dish industry, consumer feedback is more rational and calm. On social media, more comments about prepared dishes indicate a clear lack of trust in these products. Behind the slightly "awkward" atmosphere between the industry and the market, it also means that the prepared dish market has entered a new bottleneck. The market is mixed, with good and bad products, and consumers have many "misunderstandings" about them. The most important reason for this problem is the lack of perfect rules to regulate the industry. For the industry to mature, the mismatch between demand and market supply, besides the crowding of entrepreneurs and capital, standardization is an important prerequisite. There is an urgent need for strong players to break the deadlock with high-quality products.
As a retail terminal, Walmart has upgraded its efforts in prepared dishes this year, proposing a "complete meal solution" and drawing a completely different approach. Walmart is not considering from the perspective of a channel provider, such as whether it is a traffic product or whether the gimmick is sufficient, but from the customer's perspective in product selection: "When to eat," "What to eat," and "Is it worth buying?" This fundamentally new approach is the starting point for Walmart to differentiate and achieve distinction in product selection this time. By cooperating with well-known catering companies and presenting a complete meal solution from cold dishes, soups, hot dishes, staple foods to desserts, Walmart solves problems for consumers. This is also an industry-first approach, opening new ideas and new ways of playing in the prepared dish track. Zhu Xiaojing said, "At Walmart China, we will continuously enhance differentiated product strength, build strong supply chain capabilities, improve end-to-end efficiency, and continuously optimize the omni-channel experience to fulfill our promise to customers of 'spending less and living better,' creating continuous value for customers and members. This is what we call returning to the business essence of retail."
When it comes to specific supply chain processes, Walmart's backend product selection capability, middle strict quality control, and front-end service capability form a closed loop, continuously improving product strength and overall supply chain efficiency. First, in backend product selection, Walmart has precise insights and focuses on family consumption scenarios. Not only does it have a strong procurement and sales team to support new product selection, but it also uses famous southern and northern restaurants as an entry point, providing selected signature dishes gathered on one table, which is refreshing. Specifically, Walmart is more precise, only choosing well-known catering companies to create an experience "no different from dining out." Zhu Jun, Senior Vice President of Walmart China and Chief Procurement Officer of Hypermarkets, introduced that the high fidelity of all dishes was a very important consideration in this product selection.
This effectively fills the market demand for high-end quality prepared dishes and well satisfies the consumption scenario of family gatherings for prepared dishes. This restaurant-grade prepared dish truly targets customers who cannot compromise on quality and taste, pursuing authenticity, grade, and deliciousness, with a demand level one step above "convenience." From Walmart's chosen partners, such as Cantonese cuisine Tao Tao Ju, Beijing cuisine Wang Shun Ge, Huaiyang cuisine Xiao Chun Niang, Hunan cuisine Wang Xiang Yuan, and Shandong cuisine Chuan Ge, it can be seen that Walmart's logic is: either well-known time-honored brands with absolutely differentiated signature dishes that consumers buy into, or small but beautiful restaurants with the same pursuit of quality, allowing customers from other places to enjoy authentic products.
Besides product selection capability, the second capability reflected in prepared dishes is strict quality control. All factories cooperating with Walmart for prepared dishes have passed 100% strict factory audits, ensuring safe and reliable products. Moreover, Walmart has established strict standards throughout the entire cold chain distribution, store display, and final delivery to customers' homes, with comprehensive management from product packaging to delivery box specifications. This entire process not only ensures the high quality of prepared dishes but also controls costs, ultimately passing on benefits to consumers at the terminal, providing internal momentum for product sales.
Finally, the front-end experience capability is self-evident. Walmart has stores across the country, coupled with its home delivery business layout, allowing the entire sales chain to adapt to consumer habits. Extensive in-store tastings and one-hour delivery online better meet the demand for home consumption of prepared dishes. By focusing on product strength itself and continuously enhancing value through an efficient supply chain, Walmart may "refresh" consumers' perception of prepared dishes and establish a high-end prepared dish mindset.
In fact, the essence of prepared dishes is still FMCG. When products become homogeneous, industry competition will turn into competition on cost-effectiveness and user insight capabilities. At this point, differentiated tracks become prominent. Walmart, as a retail enterprise with precise product selection and excellent supply chain capabilities, can help build deeper competitive barriers in the development of prepared dishes. Because precise differentiated product selection can quickly capture market gaps and lead trends, while excellent supply chain capabilities mean higher cost-effectiveness, better freshness preservation and delivery capabilities, and the ability to adapt faster to changes in consumer dietary needs.
Standing Above Retailers, Empowering the Real Economy
Product strength is one of the keywords Walmart has mentioned most in recent years. Besides product selection systems and innovation capabilities, the current exploration of prepared dishes can also be seen as an attempt at product strength. Looking at the past two years, Walmart has been highlighting the building of product strength, especially focusing on "value." The product selection for the southern and northern famous restaurant prepared dishes also highlights Walmart's product selection logic—precise and restrained. In the past two years, Walmart hypermarkets have been diligently polishing and sharpening product strength, requiring Walmart to be very focused and concentrated in product selection, strictly screening, making trade-offs, and ensuring that every product can provide customers with a strong sense of value and improve their lives. From the upgrade of global sourcing to providing the "Signature Dishes from Famous Southern and Northern Restaurants" complete meal solution, it can be seen that Walmart's reform of product strength is systematic and methodical, pursuing essential innovation and change at the category level.
The core competitiveness of a supermarket is its products. Compared to supermarket companies that rely solely on fresh produce as a traffic driver, Walmart, which is committed to building product strength, has more advantages. Especially with the current layout of prepared dishes, it can further widen the differentiated competition with peers. At the same time, through prepared dishes of different tastes and brands, with simple processing, it can easily meet the needs of fast-paced consumers. Under the premise that prices are acceptable to most consumers, it is easy to generate new consumption hotspots and form its own highlights.
From the perspective of the catering industry, it is currently in a "difficult" moment. Prepared dishes are a middle ground between delivery and dine-in, innovating products while meeting basic dietary needs. Through Walmart's front-end stores and omni-channel advantages, they can go nationwide, establishing a second growth curve for catering companies, thereby boosting Spring Festival consumption and invigorating the economy. "Among the brands we are currently cooperating with, more than half are testing the supermarket retail channel for the first time," Zhu Jun said. Choosing Walmart for their debut is undoubtedly due to Walmart's trustworthy business reputation and strong corporate competitiveness. Take the Northwest cuisine brand Xibei as an example. Before cooperating with Walmart, they were worried about the high costs and complex routines of entering supermarkets. Walmart's simple and transparent cooperation model, respect for professionalism, and empowerment with retail experience allowed Xibei to take "this step," and their signature dishes, spicy lamb spine and Mongolian beef ribs, are now available in Walmart channels.
In addition, Walmart helped Wang Xiang Yuan, which has 55 physical stores, turn hot dishes into prepared dishes for home scenarios, starting from scratch in all aspects such as product selection, packaging, marketing, and transportation. With its efficient supply chain advantages, Walmart helped the well-known East China restaurant Xiao Chun Niang expand nationwide, allowing the brand to focus solely on product taste, quality, and supply, leveraging smaller effort and investment to tap into a larger market. Through these entire processes and measures, Walmart is truly driving "win-win" for surrounding enterprises, driving the growth of the entire supply chain upstream and downstream, and bringing fresh development models and energy to the real economy.
It can be seen that Walmart is no longer just a retailer providing buying and selling; it has placed its role, responsibility, and duty at a higher level. More importantly, catering companies are relatively limited geographically, while prepared dishes offer a larger potential space and richer imagination. Especially with Walmart's omni-channel solutions, from one-hour delivery to city-wide next-day delivery, it aligns with consumer shopping habits, allowing consumers to taste in physical stores and buy online, experiencing dishes in all aspects. From the prepared dishes Walmart currently offers, the categories are relatively rich, with broad brand coverage from south to north, and consumers are sufficiently assured. Despite the "mixed bag" in the industry, Walmart's supply chain advantages precisely make up for shortcomings and improve overall efficiency. Now, the battle for prepared dishes in the supermarket format has begun, and Walmart is opening a new track with a new approach: not starting from channel thinking but from the customer's perspective. This long-term approach is the key to winning lasting victory.