In Walmart's neighborhood stores, we see some "non-consensus."
At the street - facing area on the first floor of Shenzhen Bao'an Wanda Plaza, the new Walmart Neighborhood Market is very eye - catching. The baked goods priced at 9.9 RMB and the roast meat window with a distinct "old - Guangzhou flavor" at the entrance are the first elements that catch the eye. Coupled with the bright and lively visual style featuring a combination of blue, yellow, and white, it's hard not to stop and take a look.
This is the fourth "Neighborhood Market" opened by Walmart. In the first two days before its opening, many residents from nearby communities tried to enter the store when passing by. Even after learning that it hadn't opened yet, they still craned their necks to take a look and then left with a flyer introducing some of the products.
In the retail sector, the "Neighborhood Market" is not a new concept, but it has become a "hot trend" in the past year or two. The fact that Internet platforms and traditional retailers are scrambling to enter the market is evidence of this. Under this wave, some "consensus" and "methodologies" have emerged, such as how to plan the store area and the number of SKUs, what level the proportion of private - label products should reach, what the best proportion of online business is, and how to integrate the store and the warehouse, etc.
However, in the account of Zhu Jun, the CMO of Walmart stores, the dazzling numbers and indicators are completely erased. Regardless of how the specific business format changes, "what the customers need" remains the only starting point for thinking. "Customers first" is also a principle that Walmart, this retail giant, has emphasized many times during its transformation period in recent years.
The Neighborhood Market is another new move by Walmart since its transformation to "reshape the brand". On the eve of the opening of the new store, we conducted an on - site visit and saw its clearer understanding of the market and demand, its consistent strategic determination, and the "self - awareness" of self - iteration and perseverance as a leading retailer.
Customers buy products, not just private - label brands
For a retailer, the products displayed on the shelves are the most direct form of self - expression. In this sense, the Walmart Neighborhood Market further continues and reaffirms its distinct value proposition.
In December last year, Walmart's transformation idea was already evident in its large - scale stores. Zhu Jun told media such as 36Kr that "over the past period, the team has been constantly thinking about who Walmart's customers are, and today we have a very clear answer." - 175 million urban middle - class customers.
After nine months, the change is that Walmart has made good progress with its new store format, the Neighborhood Market. What remains unchanged is the focus on "people". "Customers first" is still a phrase that Zhu Jun subconsciously mentions many times, and the Neighborhood Market still serves the same group of people.
In the communication with the media, Zhu Jun as always excitedly talked about the popular products, such as "the small green - bottle milk of Woji Fresh has received very good feedback from customers." Then he picked up the milk - flavored steamed buns and ice cream made from this milk and showed them, saying, "Around this popular product, we have also developed some extended products that everyone will surely love."
One detail is that since January this year, Zhu Jun and his team have organized multiple customer surveys, trying to find a more suitable model for the Neighborhood Market in terms of product selection and fulfillment services. "In the past few years, we spent a lot of time refining our products and achieved certain results. In the past eight months, we have been working on improving the operational quality, and today we are still listening to the voices of our customers." Zhu Jun said.
Whether it's the large - scale stores or the Neighborhood Markets, Walmart's new - generation stores, shelves, products, and external communication all present a strong impression - this retailer has no "ego". Starting from the most essential customer needs in retail, rather than from business logic and self - achievements, has led to some of its "non - consensus" practices.
The understanding and attitude towards private - label brands is one of Walmart's "non - consensus" practices.
Currently, "private - label brands" seem to have become the "golden rule" in the retail industry, and retailers are scrambling to pursue a higher proportion of private - label products. The reason is that, on the one hand, private - label products are naturally "unique", and on the other hand, they are also regarded as a "good way" to reduce distribution channels and increase gross profit margins. "What's the proportion of your private - label products? Why is it so high?" are also questions that Zhu Jun is often asked.
In the face of the more attractive "business model", the question of "why private - label brands exist" has been largely ignored. In fact, they don't exist just because they can make retailers earn more money. Behind the trend is still the customers' demand for cost - performance and their pain points. Providing products with quality comparable to or even better than branded products, and at the same time, offering products with a higher sense of value to help consumers save money and live better is the fundamental goal.
What a retailer really should do is to identify customer needs and participate more deeply in the supply chain to achieve "cost reduction" across the entire chain. This is why we often say that retail is a tough business.
From the perspective of product presentation, the shelves in the Walmart Neighborhood Market are indeed filled with products of its private - label brand, Woji Fresh. However, during the process of introducing the products, Zhu Jun talked more about the characteristics of the products themselves, such as "the protein content of this milk" or "this instant noodles taste like freshly - cooked noodles at home", etc., and rarely distinguished between Woji Fresh products and branded products.
"Actually, I don't deliberately talk to the team about the quantity of PB (private - label products), nor do I emphasize its sales proportion. The numbers themselves are meaningless. For me, the most important thing is whether the product is recognized and what the customers' feedback is." Zhu Jun said.
Perhaps it is precisely because of this more "back - off" starting point that Walmart also shows an open - minded confidence and a frank self - assurance in its approach to private - label brands.
All the products in the Walmart Neighborhood Market are in cooperation with leading brands or leading factories, and they have formed full "consensus" and "mutual respect" with their partners. Some products on the shelves are private - label products of Woji Fresh, some are "exclusive" products developed by leading brands for Walmart, and some appear in the form of "branded products".
"If the supplier wants to build its own brand, we support it. If it wants to produce exclusive products, special - supply products, or OEM products for Walmart, we also welcome it. We create together to ultimately serve the customers that Walmart wants to serve." Zhu Jun said. In the major transformation of the Chinese retail market towards the quality stage, the reconstruction of the product system is a complex issue. However, by returning to the most fundamental "customer needs", Walmart has grasped a strong main line, making the way of thinking about the problem simpler.
Today, it is difficult for a retailer to meet the needs of all customer groups. A limited and focused range of SKUs means that whoever can first define its target customers and produce the products they need will gain an overwhelming advantage. For Walmart today, truly creating value for 175 million urban middle - class customers, helping them save money and live better, forms the underlying logic of all its actions.
The Neighborhood Market is not an isolated "hot trend", but a necessity for today's "omnichannel" strategy
Just like "private - label brands", "Neighborhood Markets" and "community supermarkets" should not be understood as just a trendy concept.
Large offline supermarkets with a wide range of products but unable to be accessed at any time cannot be the only form to meet consumers' needs, so e - commerce emerged. Now, as the general consumers' demand for shopping convenience has further increased, community supermarkets that are within a 10 - minute walk and do not require waiting for delivery have become a new addition. Keeping up with the changes of customers and even exceeding their expectations is what Walmart is best at, and it is also the inherent gene that has allowed it to remain at the forefront of the global retail industry for many years.
"One inventory for both online and offline" is another "non - consensus" feature of the Walmart Neighborhood Market and a clue to understanding Walmart's "omnichannel" strategy.
"Some people ask if these products are available in the large - scale stores. Of course, they are. Are they available on the Walmart App? Of course, they are." During the visit to the Neighborhood Market, Zhu Jun clearly emphasized many times, "We have a unified plan for multiple store formats and omnichannel operations, and the products are from one inventory." For them, the difference between different store formats only lies in different demand scenarios. For example, the Neighborhood Market focuses on fresh food, while the large - scale stores are equipped with selected non - food products on top of that. More non - food products with lower immediacy requirements are moved online.
This is completely different from the practice of other retailers who divide customers between large - scale stores and small - scale stores and offer "two inventories". In the latter's logic, the customers of large - scale stores are often more high - end and pay more attention to quality and product variety, while the customers of community stores focus more on cost - performance and pursue extremely low - priced "blockbuster products". However, Walmart's thinking is completely the opposite - "people" are still the most fundamental starting point. The 175 million urban middle - class customers need both the convenience of the Neighborhood Market and the variety of the large - scale stores, but their demand for the cost - performance of the products themselves is the same.
By now, Walmart's "unified plan" has presented a complete and clear division of labor. The three models composed of large - scale stores, Neighborhood Markets, and e - commerce are inter - embedded, enabling consumers' needs in any scenario to be met. The large - scale stores are for "leisurely shopping" and will still be the preferred destination for one - stop shopping. The e - commerce business, which combines public and private domains, provides experiences with different delivery times and fulfillment services. On this basis, the launch of the Walmart Neighborhood Market actually further fills the "quick - shopping" scenario, based in the communities closest to the customers, and meets the daily high - frequency shopping needs within the "10 - minute walking life circle".
When the Neighborhood Market, small - scale stores, and discount stores became a "hot trend", Zhu Jun was asked at a media communication meeting, "What is the core motivation for Walmart to launch the Neighborhood Market?"
He didn't mention the changes in the industry or the actions of competitors, but once again mentioned "customer needs". "Letting us get closer to the customers, giving them an extremely convenient experience, and further meeting their expectations or even exceeding them is the meaning of the existence of our Neighborhood Market."
Walmart's essence lies beyond "terminology" and "business"
Taking a broader view, today's Chinese retail industry is like a kaleidoscope. Traditional supermarkets are making adjustments and reforms, and Internet giants hope to further blur the boundaries between online and offline. New moves are emerging one after another, indicating obvious major changes.
In many recent surveys by 36Kr, retail industry insiders often sigh about the complexity of the problems, such as "it's not that easy to increase the proportion of private - label products", or "the store - expansion rhythm and city selection need to be carefully considered", or "under what conditions the UE model can be profitable", etc.
However, Zhu Jun's state is somewhat the opposite. In the communication, he repeatedly said that "retail is actually not that complicated."
The underlying basis for "not being that complicated" is the principle of "customers first" that Walmart has always adhered to since its establishment. In the subsequent more than 60 years of development, whether it is the unwavering commitment to "everyday low prices" or the timely changes such as actively developing e - commerce and promoting store transformation, all have been carried out along this principle. "Thinking too much will hinder strategic focus. So for me, it's all about customers first. This is the starting point and the end - point of all our strategies and actions." Zhu Jun said.
A clear starting point makes Walmart's understanding of "success" simpler and purer. This is its third unique feature.
In the past year, the expansion pace of community - type supermarkets in China has accelerated explosively. Store efficiency, UE model, etc. are all issues that retailers are extremely concerned about and are regarded as the "yardstick" for whether a single store is successful and whether the expansion expectation is valid.
However, when it comes to the expectation of the store efficiency of the new store, Zhu Jun expressed a different view. "A high store efficiency and a high proportion of private - label products in a certain period do not necessarily mean success. What we consider success is the NPS (Net Promoter Score). The continuous positive and negative feedback from customers is more meaningful."
Taking store location as an example, Walmart's principle for opening stores is: open where the customers are. As for how many Neighborhood Markets to open around a large - scale store and which tier of cities to prioritize for expansion, in Zhu Jun's view, these are not the primary considerations. In addition, there isn't much complex consideration about what products to present in different store formats. "For example, small stores solve the scenarios of five meals a day, so products with high repurchase rates are placed in the store. That's all."
As we understand, Walmart will accelerate the opening of Neighborhood Markets in the future. "Currently, there are only four stores. I don't know if it can ultimately be defined as 'successful', but at least the customers' feedback has been really good so far." Zhu Jun said.
As Chinese consumers become more mature, the demand for good products and convenience has become increasingly prominent. The Neighborhood Market, which is closer to consumers, has indeed become a new trend, and the topic of intensified competition is frequently discussed. However, behind the complex concepts and terminologies, whether it's the Neighborhood Market or the implied discount retail and instant retail, it's still the consumers' needs themselves.
Today, Walmart's choice of target customers is clearer than ever. Taking the urban middle - class families as the starting point, all "products" and "sales channels" revolve around the needs of this group. This way of thinking led to the successful transformation of Walmart's large - scale stores in the past period and also constitutes the motivation for continuing to explore new store formats.
At the "2025 Walmart China Supplier Summit" held at the end of June this year, Zhu Xiaojing, the CEO of Walmart China, said, "As Mr. Sam Walton, the founder of Walmart, said: We have only one boss, and that is our customers." She almost repeats the same meaning every time she appears in public.
At the just - concluded Walmart second - quarter earnings conference, an analyst from Morgan Stanley asked the management questions related to competition and advantages. Doug McMillon, the global CEO of Walmart, also showed a consistent attitude in his reply: "We know what our strategy is, and we understand the customers' needs. Like you, I also often look at the competition in the industry, but we still focus more on the customers' needs."
Nowadays, the "one - stop shopping" provided by a single model and positioning can no longer meet consumers' diverse shopping needs, such as the sense of value of products, product differentiation, and shopping convenience. This is also an opportunity for retailers to delve deeper into and a growth space to focus on.