TECHNOLOGY

Walmart amps up strategy for upcoming Chinese e-commerce festival

BY Deena M. Amato-McCoy

Walmart is making big moves to ensure that it can serve Chinese shoppers efficiently during a crucial timeframe.

The discounter is further integrating its platform, supply chain and customer resources in China with partner JD.com — efforts that will prepare the companies to serve shoppers during the launch of the first JD-Walmart 8.8 omnichannel shopping festival on Aug. 8. The event will offer savings across all the different JD and Walmart channels, and reward customers for shopping multiple touchpoints.

The shopping festival will also help Walmart extend its reach to the 99% of the country’s population that JD’s delivery network covers. The new initiatives were designed to ensure that shoppers throughout China would get faster and more convenient access to merchandise through multiple channels, according to Walmart.

These new initiatives will include:

Inventory integration. The companies will deploy a jointly-developed supply chain and backend system to integrate inventory management. When a customer places an order on JD.com, JD’s proprietary order management system will analyze data from both companies’ stock systems to determine whether a JD warehouse or Walmart store is closer to the customer, and dispatch a JD courier accordingly.

The integration will improve delivery efficiency, optimize delivery routes for JD, and increase Walmart’s inventory turnover rate. The partners will pilot the program in six cities: Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu and Wuhan.

Customer integration. Customers can scan a QR code at more than 400 Walmart stores in China to earn coupons that can be used at the Walmart online stores on JD.com during the 8.8 shopping festival. The event will also feature a live stream broadcast from Walmart's first U.S. store and an 8.8 Reunion during the day, where multichannel customers can share their experiences to earn additional rewards.

Store and platform integration. As part of its ongoing omnichannel push, JD.com recently set up its first JD Home store inside a Walmart store in Shenzhen. (JD Home sells electronic products that complement Walmart’s product categories.) JD is also establishing JD pick-up stations in Walmart stores to provide more procurement options for JD digital customers.

Walmart teamed up with JD.com in June 2016, investing in a 5% stake in the company. That investment has since increased to more than 12% in February.

Since teaming up with JD.com, Walmart has launched five online stores on JD platforms — move that enables Chinese consumers to shop the Walmart, Sam’s Club and ASDA brands. In addition, 134 Walmart stores across 18 cities have also joined the JD Daojia platform, offering shoppers one hour deliveries.

“Since forming our strategic partnership with JD.com in June of last year, we have continued to expand our omnichannel strategy to better serve customers and grow our business in China,” said Ben Hassing, senior VP of Walmart China e-commerce and technology.

“Our ability to tap into JD.com’s advantages across logistics, big data, technology and customer service gives Walmart a huge advantage in reaching China’s rapidly expanding consumer class,” he added. “We look forward to further bringing together our strengths in digital and physical retail to take the customer experience in China to the next level.”

Walmart has already seen its synergies with JD.com pay off in a big way. During JD’s June 18 Anniversary Sale this year for example, Walmart’s international products sales on JD.com increased four times compared to sales during JD’s Single’s Day (November 11) shopping festival in 2016.

By July 2017, the number of fans “following” the Sam’s Club Flagship Store on JD had reached nearly 700,000. In addition, Walmart’s sales on the JD Daojia platform increased by more than four times in June 2017 as compared to January 2017, according to the retailer.

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