The U.S. retail chain Walmart reported a quarter of strong performance in China, with net sales in the country surging 21.8% to USD6.1 billion on the back of Sam’s Club’s rapid expansion and accelerating online demand. Walmart posted global revenue of USD179.5 billion for the fiscal third quarter, up 6% in constant currency, while adjusted operating income rose 8% to USD7.2 billion. E-commerce continued to be a major driver, growing 27% worldwide. Business in China again outperformed Walmart’s global averages. The company’s net sales reached USD6.1 billion, up 21.8% and comparable sales in the market climbed 13.8%, while e-commerce sales jumped 32% and accounted for more than half of Walmart China’s total sales. Gross margin slipped amid changes in business mix, but stronger sales, a favorable shift in channels, and higher operational efficiency helped lower the cost ratio and lift operating profits, the company said.
Much of the momentum continued to come from Sam’s Club, Walmart’s membership warehouse chain, which is emerging as one of the company’s strongest growth engines globally. CFO John David Rainey said that sales in China rose 22% in the quarter, reflecting “ongoing strength at Sam’s Club” and e-commerce growth of “more than 30%”. Sam’s recorded double-digit transaction growth during the quarter and added eight new clubs in the past 12 months, including one opening in the third quarter. On November 21, Sam’s Club China opened a new store in Beijing’s Changping district – the city’s fifth and the company’s 61st nationwide. The retailer is preparing two more openings in December in Shanghai and Guangzhou, Guangdong province. Each of the stores in Jiaxing of Zhejiang province, Hefei of Anhui province, Zhongshan of Guangdong province and Yangzhou of Jiangsu province is the first entry in each city.
Walmart China said 2025 will be Sam’s Club’s busiest expansion year in China, with 10 new stores planned – the most it has ever opened in a single year. The chain expects to maintain rapid expansion beyond 2025 as its high-income, high-frequency membership model gains traction. Douglas McMillon, President, CEO and Director of Walmart, said during the Q3 earnings call: “The team in China is delivering orders fast. Nearly 80% of digital orders arrive in under an hour. In digital retail, China is more advanced than any other market in which we operate. In October, I visited three Chinese cities. In Hefei, a city of about 10 million people, we visited a relatively new Sam’s Club that was outstanding. We now have a healthy pipeline of new clubs coming.” Walmart has identified urban middle-income households and single consumers as its core customer groups in China, the China Daily reports.
