Walmart Joins Forces With Meituan to Bolster Chinese eCommerce Unit
Walmart has teamed with China’s Meituan to fortify its eCommerce business in that country.
The partnership will see Meituan provide delivery service for Walmart products and begin featuring the retail giant on its popular app, Reuters reported Tuesday (Dec. 17), citing a WeChat post by Walmart’s China unit.
That post added that the collaboration will help Walmart bolster its eCommerce service in China, which makes up close to half its sales in that country.
The Reuters report notes that Meituan is China’s largest food delivery provider, though it also offers services like deliveries of other products, as well as bike-sharing and ticket booking.
Jason Yu, general manager at CTR Market Research, told Reuters that Meituan is the company most consumers in China use for quick delivery, giving Walmart greater visibility from its presence on the Meituan app.
According to the report, Walmart in November reported a surge in net sales in China — from both its flagship store and Sam’s Club — jumping 17% to $4.9 billion. Meituan, the report adds, has also seen sales climb as Chinese consumers focus more on low-cost and discounted products. The company last month reported a 22.4% increase in third-quarter revenue to roughly 94 billion yuan ($12.9 billion).
The partnership comes roughly four months after Walmart announced it had sold its entire stake in another Chinese eCommerce giant, JD.com. The American company had owned an almost 10% stake in JD as of late 2023.
Walmart first purchased shares in JD in 2016 in exchange for the sale of its eCommerce business Yihaodian.
In related news, PYMNTS wrote last week about Walmart rival Amazon’s efforts to push into the quick commerce sector, challenging Walmart with speedy deliveries in India and testing new delivery drones in the U.S.
Tom Collinger, clinical associate professor emeritus at Medill-Northwestern University, told PYMNTS that this is the latest step in Walmart’s effort to train consumers to expect more convenience. He is not, however, convinced it’s a game changer.
“It may, however, attract the heavy user of grocery delivery apps, so that even the slightest amount of new triers could convert to regular users, and in grocery, lifetime value is substantial,” said Collinger.
“I’m guessing that the greatest advantage here will be to possibly scrape off a few heretofore non-customers who now see this uncommon convenience being what they want or need.”
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