Global retail giant Walmart has been in the Chinese market for 28 years. On November 19, at the "2024 China Retail Leaders Summit" hosted by the China Chain Store & Franchise Association (CCFA), Walmart China President and CEO, and CCFA Vice President, Zhu Xiaojing delivered a speech titled "Reshaping Customer Value, Leading the Future with Trust." She said, "The evolution of retail is not about the replacement of concepts, but about the persistence and innovation of every retail practitioner, supplier, and partner, jointly creating lasting value for consumers, thereby achieving long-term high-quality development in the retail industry." On the same day, Walmart released its third-quarter fiscal results for the period ending October 31, 2024, and raised its full-year earnings guidance. In the Chinese market, Walmart's third-quarter net sales were approximately 35.5 billion yuan, up 17.0% year-over-year, with comparable sales growth of 15%. Sam's Club and e-commerce business provided strong growth momentum, and both Sam's Club and Walmart hypermarket formats saw positive growth in offline foot traffic. In the first three quarters, Walmart China's net sales totaled 110 billion yuan, on track to set a new record high. Walmart's Long-Termism At one time, Walmart's performance was also sluggish. As foreign players like Tesco, Carrefour, and Metro successively left the Chinese market, we once thought that Chinese retail had completely defeated foreign capital. In 2020, there were media reports that "Walmart plans to sell part of its stake in its China hypermarket business," which was quickly denied by Walmart China's official channels, but there were reasons behind it. In over two decades in China, before 2020, Walmart may have only had a brief highlight in fiscal 2013 (when Walmart's global revenue fell 6%, but China grew 24.5%), and during that period, it experienced seven changes in leadership. In just three years from 2021 to 2024, with the advent of the post-pandemic era of savvy and self-pleasing consumption, Sam's Club quickly became popular. Every dimension of supermarket operations—membership models, private labels, curated selections, online and front-warehouse, product quality, low prices—confirmed its status as the world's number one retailer. Looking at the process in between, it's sometimes hard to say whether this was luck or the result of long-termism. But in the logic of Walmart globally, it must be a manifestation of Walmart's long-termism. First, Walmart's top management views the Chinese market as a key part of its global strategy and has repeatedly formulated medium- and long-term development plans for China. In terms of resources, it has made significant investments in local supply chains, logistics, and information technology; Walmart's global strength also ensures that Walmart China has ample resources, such as tolerating early losses in e-commerce and membership stores, and reasonably evaluating investment cycles. Only with strength can one withstand challenges. Second, in terms of business formats, Walmart has always adhered to its main business. Hypermarkets, membership stores, and e-commerce have always been Walmart's focus. From 2018 to 2021, Walmart also explored neighborhood supermarkets but later abandoned them. In terms of format entry cycles and business strategies, Walmart has its own experience and certainty, such as opening membership stores, adhering to category positioning, large-scale procurement to reduce costs, focusing on core customers, and practicing Every Day Low Prices. During the peak of new retail, Walmart's struggles and losses, precisely because it didn't over-experiment, have turned into today's dividends. Third, actively establish strategic partnerships with local Chinese enterprises to jointly expand business areas. Continuously consolidate the supply chain and product value, forming a strong brand presence. Currently, there are also many comments that although Walmart hypermarkets have completed upgrades, there is still a certain gap in environment, hardware, and scene comfort compared to domestic stores. To some extent, because of Walmart's headquarters, Walmart China, despite its many innovations, is generally contained within Walmart's value framework. What is most enviable is the 17% performance growth in the third quarter, with sales exceeding 100 billion yuan in the first three quarters. Compared to leading domestic brands, Walmart, especially Sam's Club, has once again become "someone else's child." And Carrefour, the "originator" of domestic hypermarkets that once drove Walmart crazy, now has only 4 stores left in China, and based on netizen feedback, it is expected to close soon. We are not trying to praise one and criticize another; every enterprise has its own development cycle. We just want to explore our own strength from these comparisons and turning points: How can our enterprises, or even individuals, achieve a beautiful, long-termist state? Three Levels of Long-Termism In fact, we have heard the term "long-termism" for a long time, but why are there few Chinese companies or entrepreneurs who are praised as "long-termists"? And in the future, how many companies will enjoy this honor? This reminds us of what Amazon founder Jeff Bezos said: "I often get asked the question: 'What's going to change in the next 10 years?' But I rarely get asked: 'What's not going to change in the next 10 years?' Long-termism is a lever, a very important way of thinking." Looking at the history of most large-scale retail enterprises, we see dazzling changes, with new year strategies emerging one after another, as if some new tricks are needed to inspire people! Is this really right? Many people also say that the essence of retail—products, customers, and service attributes—has not changed, but being in this industry, is it enough to just reach this level? For example, the essence of products hasn't changed, but products involve quality, price, category, strategy, style, channel, value, emotion, and many other dimensions. Where is the clear fulcrum? Retail generally takes actions in supply chain, products, marketing, technology, etc. Why do we feel that some enterprises have "long-termism" while others have "short-termism"? What's the difference? Moreover, any product should have value, so what is our uniqueness? Convenience, cheapness, safety, fun, beauty... With various words, what impression do we want our employees to have? What word-of-mouth do we want to bring to customers? How many companies can perfectly align their goal setting with customer word-of-mouth and maintain that word-of-mouth setting for a long time? Clearly, measured by the yardstick of long-termism, we still have a lot of room for improvement! The original intentions of retail enterprise management are good; no one is stupid enough to want bad products or offend customers. Many companies also say they have always adhered to a customer-centric approach and long-termism, but what about their actual performance? There seems to be a layer of conflicting logic between short-termism and long-termism. Clearly, the conflict comes from our inability to feel the logical closure between a company's thoughts, words, actions, and results. The more a company can unify its principles, methods, techniques, and tools under one logic, the stronger its brand momentum. Long-termism requires a company to persistently focus on specific values, build an operating system for this purpose, and maintain consistent logic and control the amplitude of fluctuations during the process of change. There are at least three levels of issues: 1. The starting point: the company's underlying values. From self-interest, altruism, benefiting groups, society, country, and humanity, gradually upgrading, the more universal, the more long-term. Taking profit as a goal is one orientation; being customer-centric can also develop. During the golden twenty years of Chinese retail, pursuing scale and fame seemed to be the mindset of most entrepreneurs. Of course, that was an inevitable product of a specific era, and we don't need to criticize it excessively. But today, the situation has changed dramatically—stalling, shrinking, closing, exiting... Past slogans can no longer sustain the survival of enterprises. We inevitably need to call for the upgrading and iteration of retail themes. After experiencing setbacks, we need to think clearly about what values can lead long-termism. Like Walmart, Zhu Xiaojing said that to adapt to changes in customer needs, Walmart can change almost everything, but there are very few things that will not change. These few unchanging things include our core values and the EDLP principle (the "Every Day Low Prices" strategy proposed by Walmart in 1974). The more confused the period, the more profound thinking is needed; the more we need to cross cycles, the greater the pattern required. We always say there are many revolutions in business. For whose benefit? What kind of people to unite? What creation to undertake? Each is a strategic choice. Facts have repeatedly shown that enterprises must have a greater mission to unite more people! Today, to get out of the predicament, for the city, for society, for the country, we should dare to shout such a loud slogan! 2. Consistency: whether knowledge and action are aligned over a long time axis. Once the strategy and value proposition are established, even if great, if they become slogans on the wall, empty slogans, or double standards in execution, it will definitely be troublesome. We do not deny that due to the personality or ability of entrepreneurs, or the operations of professional manager teams, enterprises may have short-term deviations, but over a long time axis, the amplitude of fluctuations should be controllable. Today, we need to reflect more: why can't our long-term strategies always be implemented? There must be some sticking points—whether it's the boss's cognition, lack of institutional mechanisms, or insufficient time. When we think about the future, we must solve this logical closure. 3. Rhythm: the intensity of enterprise change. At any time, there will be hot topics in the industry. Adapting to the times and changing customer needs is actually the mission of retail. But summarizing many attempts in the new retail stage, we suggest that currently, whether it's technology application or format exploration, physical retail is often more suitable to be a "late majority." Retail should be a slow industry. Repeated tossing may also give users a different impression. Like Hema in the past, it had a great reputation for a while, but in just eight years, it repeatedly introduced new propositions. Now its voice has decreased, and the industry has more and more praise. For retail enterprises, it is important to make changes add to the credibility of long-termism. Enterprises need to coordinate their adjustments and upgrades into a high-pattern value framework. Changes should always have a long-term main line, and enterprises will have a boutique reputation, like Pixar's "anti-tradition, adhere to uniqueness" and "story is king," and Pangdonglai's "freedom and love" and aspiration to become a school. What should our enterprises do? The bigger logic is to integrate a high-pattern starting point + time investment + correct rhythm, with principles, no hesitation, no fear of difficulty, and long-term practice! The market will consolidate cognition, and sincerity will consolidate trust! Zhu Xiaojing said: Trust is not a one-way promise, but a multi-party consensus. Trust is not only a rational process, but also a long-term, profound emotional and psychological construction process. Building trust requires the accumulation of time; it is not a completed state, but an eternal ongoing process. So, thinking about 2025, or even 2035, what should we think about? How to change is to remain unchanged? But between change and constancy, there seems to be a layer of logic: how does change fit with long-termism? There must be a method in between. Clearly, we cannot treat mechanical repetition as persistence and then move ourselves with low-level repetition. Today's retail should clarify several choices: 1. Always put internal people first Currently, with Pangdonglai as a model, we can basically say clearly that retail enterprises that do not solve long-term employee satisfaction will never have long-termist results; greedy entrepreneurs will never have long-termist returns. Some might say, is it possible for employees to endure hardship first, with lower wages, and then get raises when the company improves? It's difficult; the era should have passed that stage! From the logic of retail input-output, supplementing employee benefits has become the starting point of new business. From the current social reality, matching labor intensity and working hours, supermarket employees' income is often the lowest. If employees are unwilling to work or treat customers with cold violence, the company cannot have a big future. Today, the standard for evaluating enterprises is shifting from who is bigger in scale to who has stronger individual stores, higher profit margins, happier employees, and thus higher quality. Only when employees and internal teams are excellent can customer respect, identifying customer changes, and meeting customer needs have a long-term foundation. 2. Focus on no more than two points Whether it's business formats or annual strategic priorities, multi-format, diversification, and multi-strategy, except for independent business units, few companies have that many resources and energy. Currently, cultural learning, store adjustments, quality orientation, bakery and deli, and front warehouses seem to have become common themes. If not careful, corporate transformation becomes multi-pronged, which is not very beneficial to development. Focus, concentration, limited expansion, and small adjustments should be the only way to long-termism. Today, employee willingness and new efficient supply chains should be the main focus of current retail. 3. Control the rhythm of stages What suits you is the best; if you are on the right path, rhythm is very important. In the book "Decisive Moments in History," it tells the story of two teams racing to the South Pole in 1911. One was Captain Scott, whose method was to walk hard when the weather was good, exhausting himself; the other leader was Roald Amundsen, whose method was to strictly restrain himself regardless of weather, only walking 21 kilometers. On December 14, 1911, Amundsen's team became the first to reach the South Pole. Scott's team arrived 34 days later, and the saddest part was that on the return journey, all five members of Scott's team froze to death. Today's retail challenges still require rhythm. Just like learning from Pangdonglai, it really should be evaluated over 3 years or even longer. Corporate cultural influence, employee growth, and institutional mechanism construction need time to accumulate and will never be achieved overnight. We may not need to do big things, but we need to distinguish between large cycles and small cycles, identify the direction of things on a time scale, "aggregate small progress," and do difficult but correct things. 4. Select partners carefully For many retail enterprises, because they need to go public, have betting agreements, or have requirements for profit or scale, their actions become distorted; or because of cognitive differences, leading to severe internal friction and short-sightedness; or because of poor partner reputation, they suffer setbacks. Retail often has a multilateral ecosystem. Today, cooperation among scale enterprises is more common. But from past financial results, almost all operational cooperation projects have ended in failure, and the reasons are worth reflecting on. In addition, quality control is important, especially in the current public opinion environment. Crisis public relations after an incident is important, but doing preventive measures well is even more important. In the past, a large number of product quality issues in the supermarket sector inevitably damaged the long-term reputation of enterprises. It is important to unify suppliers, employees, partners, and other ecosystem forces into the values of long-termism and maintain high-quality operations. 5. Carefully handle turnarounds and refuse to overdraw brand credibility Retail also needs to be cautious about comprehensive transformation. In terms of resources and reputation, enterprises can create new brands for transformation, such as Guan Super and Guanpaike, and earlier Alibaba and Taobao. Some large retail groups find it necessary to implement sub-brand strategies for their formats. Using the yardstick of long-termism, independent sub-brands are stronger than joint ones, especially when one side has strong momentum. Of course, enterprises also have various changes to respond to, such as technology, formats, innovation, and markets. The most powerful method for enterprises is always to do things with the principles of long-termism! Be a Long-Termist In summary, we will find that all excellent enterprises are necessarily long-termists. The retail industry will see more adjustments and a bigger reshuffle in the future, with brands alternating between old and new, and reputations rising and falling. No matter how good "someone else's child" is, ultimately, enterprises must make their own choices. Behind a company's performance is usually a philosophy. Current thinking will definitely determine future height. Enterprises need the pursuit of principles and techniques, and perhaps more importantly, insight into long-termism. In today's situation of shifting circumstances and normal stock, imagining on a scale of 10, 20, or 30 years, even with many Sam's Clubs, Costcos, Aldis, or Pangdonglais as benchmarks, the retail industry's own value proposition and the system construction extended from it, defining long-term direction on the curve of change and constancy, remain the deep-seated issues for enterprises. Compared to Walmart, we all deserve to let time generate compound interest and do difficult but correct things. We wish Chinese retail more long-termists.