As the year draws to a close, Walmart has opened two new stores in Kunming, marking the official debut of its next-generation format. If traditional hypermarkets were like a forest of piled-up goods, bulky and massive, today's Walmart is more like a leisure and entertainment destination for middle-class families. The product selection emphasizes curation, precision, and refinement, with 16 scenario-based layouts and a rich array of in-store food offerings that whet the appetite, making shoppers linger and forget to leave. From three daily meals to carefully selected daily necessities, products are presented with a focus on "quality health, uniqueness, practicality, small packaging, and value." Shoppers are dispersed across different sections, quickly and precisely selecting what they need, with every detail exuding convenience and comfort. At the checkout, customers are swiftly completing their purchases via the Scan & Go feature, making the entire shopping process efficient and seamless, with almost no delays. This is Walmart's next-generation store, the latest fruit of Walmart China's transformation, representing its new round of change—anchoring on the omnichannel portfolio shaped for middle-class families, summarizing its own experience, and forging a brand-new transformation path. In the words of Zhu Jun, Chief Merchandising Officer of Walmart China, the goal is to start from the customer's perspective, not be constrained by the hypermarket format, discard gimmicks and distractions, and redefine Walmart: "solidify trust, restart growth, and reshape the Walmart brand." Precise Customer Segmentation Making Change Targeted Walmart's transformation in the Chinese market focuses on a more segmented demographic—middle-class families who prioritize value for money. China's middle class is on the rise; they are rational, mature, practical, and seek quality and convenience in life, but at the same time, they want to live a richer, more diverse life on a smaller budget. Traditional retail models that try to be everything to everyone can no longer meet the "picky" demands of this group. Walmart has precisely captured this trend. "They have a very clear profile: digital savvy, busy lives, and high-frequency dining needs," Zhu Jun told the author. This group also has four core principles: pursuing value for money, quality of life, omnichannel convenience, and shopping at trusted channels. Based on this insight, providing high-quality, convenient one-stop meal solutions; creating Walmart-exclusive products with big brands at low prices; and developing unique, surprising treasure products are the three major directions of Walmart's product transformation. Walmart places high-quality fresh food and groceries at a strategic priority. Its high attention to food safety and strict control over healthy ingredients give Walmart a natural advantage in food trust. This year, the quality of Marketside bakery has been fully upgraded, with daily fresh baking and 100% animal cream, and a commitment to never using sodium dehydroacetate. Professional-grade quality at half the price has quickly gained market recognition. Whether it's snacks, dried fruits, or juice drinks, "clean ingredients at a glance" and healthy formulas are the main transformation direction after Walmart's insight into customer trends. "We found that our private-label pistachios, the unsalted version's sales have surpassed the salted ones. That's a very important signal. Customers care a lot about health." By cooperating with source factories and co-creating formulas, Walmart can keep ingredient lists clean while significantly enhancing differentiation, bringing customers freshness and unique new flavors—such as apple chips with only apples in the ingredient list, zero-sugar zero-fat roselle rose drink and pomegranate black tea flower tea series, reduced-sugar corn juice containing six organic corns per bottle, whole green plum jelly, and popular new-flavor potato chips. Walmart is going all out in the food sector, especially with two killer advantages in fresh products: one is Australian chilled beef, and the other is a wide variety of frozen seafood. This not only demonstrates Walmart's strong supply chain and scale capabilities but also pushes seafood toward a safer and more value-for-money consumption route. Walmart uses ultra-low-temperature quick-freezing technology to lock in freshness at the source, ensuring the texture and taste of ocean products while reducing contamination and additive use during transportation. This way, quality is stable, prices are affordable, and global seafood delicacies can easily grace the tables of ordinary families. In the non-food sector, Walmart's approach is more straightforward. On one hand, it focuses on providing exclusive products from mainstream big brands at affordable prices, such as custom versions of Gap and NIKE, priced well below official websites, giving consumers a strong sense of value. On the other hand, Walmart collaborates with suppliers to launch a series of eye-catching products. For example, in the newly opened Kunming stores, you can find Disney Strawberry Bear plush toys, Samyang Fire Chicken Cup Noodles with Golden Cudgel, and other distinctive "treasure" products scattered throughout the store, sparking customers' desire to explore and buy. Breaking Path Dependence Returning to the Customer's Perspective Walmart's transformation in the Chinese market is not just about product innovation; more importantly, it's a deep reform of the business model. "We need to step out of professional frameworks, look at problems from an ordinary person's perspective, return to the customer's viewpoint, and get back to everyday life," said Zhu Jun. Walmart has designed the next-generation store with 16 themed sections, such as fresh produce, hot pot and BBQ, flowers, and bakery. Through this scenario-based layout, it provides customers with a more immersive and interactive shopping experience. In traditional stores, customers often face cluttered displays and lengthy shopping decisions. But in Walmart's next-generation stores, shopping is a well-connected journey: meat and seasonings interweave, bakery and milk are adjacent, and the shopping path is smooth and warm, each step like a heartfelt dialogue with life and a source of inspiration. For instance, in the hot pot section, Walmart has even placed stain-removal rollers. Zhu Jun noted, "This is us exceeding customer expectations, going beyond their imagination, and considering the additional need of clothes getting splashed in the hot pot scenario." Even more surprising, Walmart breaks the traditional hypermarket stereotype through a "light display" approach. For example, it removes main aisle displays and integrates open shelving into the daily shopping path, allowing customers to easily see the full picture of products. This is not just an upgrade in spatial design but also an improvement in consumer psychological comfort. Soft lighting and a tidy layout seem to say to customers: "Don't worry, there's no pressure here, only warmth and practicality." "Changing mindsets is the hardest part," said Zhu Jun. The 16-scenario design of the store is not about viewing store design from a retailer's perspective or how to facilitate management, but from the customer's perspective, thinking about what kind of shopping experience they want. "This requires us to break through categories, and requires procurement and operations to step out of their comfort zones, reshaping organizational work methods and assessment mechanisms." Some say retail is a way of telling life's story. Walmart is trying to reshape customers' memories with a new language. In this ever-evolving market, it is not just a supermarket but a carrier of a lifestyle. In addition to store innovation, Walmart's omnichannel strategy is also commendable, establishing a delivery network covering near-field, mid-field, and far-field through deep integration of online and offline. Zhu Jun introduced that Walmart has also lowered the delivery threshold this year, with free delivery for fresh food orders over 29 yuan, further upgrading fulfillment efficiency and scope. The "Extreme Speed Delivery" service has been upgraded from one-hour delivery to "fastest 30-minute delivery." Additionally, Walmart has densified the "On-Time Delivery" station layout, expanding customer service coverage to 5-15 kilometers from stores, with delivery times of 2-3 hours. To date, Walmart has established flexible fulfillment methods including Extreme Speed Delivery, On-Time Delivery, City-wide Delivery, Nationwide Delivery, and direct supplier delivery. Over the past three years, Walmart hypermarkets' e-commerce business has continued to grow, with the latest data showing that e-commerce accounts for nearly 50% of Walmart store sales. In 2025, Walmart will continue to expand its omnichannel layout to help more customers enjoy a multi-scenario, diversified, and multi-touchpoint convenient shopping experience. Adhering to Quality-First EDLP Building Long-Term Competitiveness Walmart's transformation is not a one-time effort; it is backed by a long-term strategy—of course, given Walmart's position and strength in global retail, there is no need to be short-sighted in the Chinese market. It insists on gradually upgrading its business model by adhering to the core concept of customer first. This is also reflected in its EDLP (Every Day Low Price) strategy. The EDLP strategy began in 1974 and is a distinctive label that sets Walmart apart from competitors. In recent years, Walmart has significantly reduced promotional activities, allowing customers to enjoy a more direct and transparent shopping experience by reducing promotional distractions. Currently, the EDLP basket covers multiple categories including bakery, eggs, frozen foods, nuts, biscuits, and aquatic products. This not only spares customers from price fluctuations after promotions but also solidifies stable quality and price expectations, reducing their decision time. In Walmart's view, EDLP is not just a "pricing strategy" but the core of the retail business model. It is not an empty slogan; it is implemented through a series of deep operational practices: direct sourcing, scale advantages, full-chain efficiency improvements, and product customization, ensuring product quality while maintaining long-term stable low prices. In the snack category, Walmart has adopted a more intuitive "simplification and standardization" strategy. By reducing bulk items and streamlining homogeneous products, Walmart has redefined the price band, launching clear and simple series at 4.99 yuan, 9.99 yuan, and 19.99 yuan. Customers entering any store will find it clear at a glance, making purchases easy and simple. "There are currently no promotional coupons on the Walmart mini-program, giving customers simple and direct stable low prices. Eggs have had no price change for 13 consecutive months, yet sales have grown significantly," Zhu Jun told the author. "By doing subtraction, we greatly improve efficiency and provide better value to customers." Clearly, Walmart is trying to redefine the value of its brand—shifting from price-driven to emotional connection. This requires not only a strong supply chain and technical support but also a long-term commitment. As Zhu Jun said: "Wherever customer needs are, we are there." Going forward, Walmart will continue to promote its omnichannel layout in the Chinese market, further deepen the integration of offline stores and online business, strengthen the implementation of localization strategies, and continue to optimize its supply chain management to ensure efficient flow of goods and services and enhance customer satisfaction. In the coming years, Walmart will continue to steadily expand in the Chinese market. "We will continue to upgrade more stores, changing wherever possible," Zhu Jun said. "Walmart focuses on people to drive transformation; we are not constrained by store format or size. The size and location of stores are not the standard; customer needs are the standard." [New Order · Symbiosis] The 10th China FMCG Innovation Conference Date: March 17-19, 2025 Location: Chengdu, China