WAL-MART China CEO: Urbanization Brings New Opportunities For Physical Retailing

In the electricity supplier "double eleven" online sales constantly refresh historical trading records, physical retail has already felt the smell of winter. According to the statistics published by the Beijing Bureau of Statistics yesterday, the total retail sales of consumer goods in this city increased by 100 yuan, of which more than 70 yuan came from online shopping, that is, less than 30% came from real retail. WAL-MART, the world's largest retail giant, has also been facing a "winter of many things" recently. It was not long ago that WAL-MART was exposed to nearly 250 people in China, and many local stores were shrinking. Some experts believe that in the face of the obvious advantages of the domestic retail area and the rapid growth of the electricity supplier, the foreign retail giants are spanforming and adapting to China. retail The new situation is somewhat tardy. A few days ago, Ke Junxian, the current president and CEO of WAL-MART China, said in an interview with reporters that physical retailing still has an irreplaceable competitiveness in the era of electricity supplier. The spanformation of China's economic structure and the development of urbanization will bring new opportunities for WAL-MART and other physical retailers.

　　 Urbanization The growth of China's middle class

"The process of urbanization in China has given birth to a group of middle and high income groups. The growth of the middle class is a very good opportunity for WAL-MART to develop."

Reporter: why has WAL-MART closed shop in China in recent years?

Ke Junxian: we have a clear three year development strategy. WAL-MART will open 110 new sites including shopping malls and distribution centers in three years, which will create more than 19000 jobs.

Opening stores and closing stores is because we are rationalizing our store portfolios, hoping to achieve faster growth by improving quality. We shut down some poor stores so that we can focus on good performance stores.

Reporter: WAL-MART's stores have been sinking to China's three or four tier cities in recent years. Does this mean that WAL-MART will target the future target customers in the three or four tier cities?

Ke Junxian: WAL-MART hypermarket really accelerates the opening of shops in the three or four line cities, in order to serve a large number of customer groups due to urbanization. In addition, we also rebuilt some of the existing stores.

As for a second tier city, WAL-MART still has plans to open stores.

In fact, regardless of the size of the city, we may choose to open a shop.

In recent years, China's urbanization process has given birth to a middle and high income group. The growth of the middle class is a very good development opportunity for WAL-MART stores and Sam's member stores.

Reporter: what is the layout of WAL-MART's new stores in Huaxin recently?

Ke Junxian: at present, the Chinese government is promoting the process of urbanization, and it also promotes the consumption ability of local residents. We are ready to serve new urban residents by adding new stores.

Not long ago, we opened 6 new stores in the same week, 2 of which are located in a second tier city, and the remaining 4 are located in three or four tier cities.

Of course, every market and every location are different.

Usually, our stores perform well in those markets with high population density and increasing middle class. We continue to look for new shops in all parts of the country, where the service industry is still developing, and we can use our expertise to provide local customers with high quality and low price goods.

Improving food safety level

"In the long run, I hope that in the future, WAL-MART China will be able to improve the level of products that guarantee food safety and provide the best cost-effective products," he said.

Reporter: did China's economic situation exceed your expectations in 2014?

Ke Junxian: China's new generation of leaders are shifting their focus to structural adjustment in order to achieve healthy and quality economic growth.

I noticed that the statistics released by the National Bureau of statistics last month showed that the GDP in the first three quarters of China increased by 7.4% over the same period last year. China's economic operation has remained stable overall. In addition, the added value of the service sector accounted for 46.7% of GDP, an increase of 1.2 percentage points over the same period last year. Based on the above data, we remain optimistic about China's economic situation.

In addition, as far as I know, the Chinese government has also formulated a series of measures to promote the upgrading of domestic consumption, so as to improve the quality and efficiency of economic operation. All these mean opportunities for development for WAL-MART.

In the long run, I hope that in the future, WAL-MART China will enhance the level of products that guarantee food safety and provide optimal cost performance.

Reporter: do you think that a series of reform measures in recent years have brought benefits to foreign enterprises in China?

Ke Junxian: China's macroeconomic continues to grow.

The new ruling program and reform mechanism established by the new generation of leaders in China, such as promoting the development of urbanization and liberalization of the market, bring us sustainable business opportunities and more equitable opportunities. The shift of policy focus to structural adjustment will help the economy grow healthier and healthier. Therefore, we still have confidence in the Chinese market and China's economic development prospects.

We operate in a challenging business environment all over the world. In response to some policy changes such as urbanization, market liberalization and other national reform processes, WAL-MART China's management team has set up a set of corresponding action plans.

　　 Increase investment in fresh investment Online retailers Challenge

"We made some changes to meet customer needs. For example, we expanded the fresh area in the store. "

Reporter: what are the opportunities and challenges of physical retailing under the impact of the electricity supplier?

Ke Junxian: I am still very optimistic about the development of physical retailing in China, and there are still lots of business opportunities in physical retailing.

For example, although e-commerce has changed people's consumption behavior, there will still be a large number of Chinese customers who prefer to buy fresh food in physical stores. They are used to confirm whether the product is fresh by tactile and olfactory. Therefore, we have made some changes to meet the needs of customers.

For example, we expand the fresh area in the store; we integrate the suppliers, retaining only the best suppliers. We have reduced the number of single stores, increased the scale of procurement, and strengthened cooperation with large suppliers. These measures not only help improve the quality of the products we sell, but also enable us to gain greater price advantage.

From the perspective of supply chain, in recent years, we have continuously improved the logistics distribution network in China, especially the construction of fresh food distribution centers.

E-commerce has changed the consumption behavior of global customers. But I think people need not only online shopping channels, but also shopping in our physical stores. The shopping experience brought by them is not the same.

Customers from all over the world are becoming more and more smart. They are eager to buy products with high cost performance and safety and enjoy good service. We will continue to focus on the retail business in the future and focus on developing our main business format, WAL-MART stores and Sam member stores. Only in this way can we better optimize our resources and give full play to our competitive edge.

In addition, we are building a community shopping center that meets WAL-MART standards. Community shopping in the future is also one of the directions in which physical retailing can be spanformed.