SHANGHAI—Wal-Mart’s tiny warehouse in eastern Shanghai
doesn’t look like much. But it’s a key part of the company’s strategy to
win over grocery customers in China who are fast heading online.
Inside, on a recent visit, a reporter found six-packs of toilet paper
and bottles of oil on the concrete floor next to piles of boxes filled
with other groceries. In the corner, a Wal-Mart employee punched orders
into a computer. Moped drivers whizzed in and out, loading up goods to
be delivered to apartment buildings within a few miles.
It’s one of 250 hubs that Wal-Mart’s Yihaodian e-commerce venture
owns and operates in 200 cities, mostly concentrated in eight key cities
like Shanghai and Beijing. All offer quick delivery of groceries.
How quick? Within three hours in some places for 100 to 150 items;
overnight in others that extend to several hundred thousand grocery
items.
Wal-Mart has been stepping up its efforts to get a bigger share of
China’s overall online business, which now has surpassed the U.S. and
dominates globally. Last July, four years after buying a minority stake,
the world’s largest retailer took full control over Yihaodian, founded
in 2008. But Wal-Mart’s overall online share is tiny in China, and some
analysts say it’s going to be hard to close the gap with the big Chinese
giants like Alibaba and JD.com.
Where Yihaodian has 250 hubs, Alibaba has 14,000 in rural China alone
that act as pick-up stations. And as of late March, JD.com had a total
of nearly 6,000 delivery and pickup stations in 2,493 counties and
districts across China.
“It will be very difficult for Wal-Mart to catch up in e-commerce,”
says Jason Yu, general manager of Kantar Worldpanel China, which
specializes in research on Chinese shopping habits.
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