Quick Take: Walmart Opens First China Convenience Store

U.S. retail giant Walmart Inc. has opened its first small-format grocery store in China aimed at integrating bricks-and-mortar and online shopping.

The 2,180-square-foot outlet in Shenzhen, the city bordering Hong Kong and where the company's China headquarters is located, is one-tenth of the size of a traditional Walmart hypermarket on the mainland and is located in a residential development rather than a commercial area.

More than 90% of the 7,000 items on sale in the mini-store, including fresh, frozen, deli and bakery goods, are also available from Walmart's online channel on the platform of its Chinese e-commerce partner JD.com Inc., which provides online shopping and delivery services.

A machine inside the store allows shoppers to check out and pay using Tencent’s digital payment tool WeChat Pay without lining up and going through a cashier. For customers who buy through Walmart's online channel, the company promises to deliver in as little as 29 minutes within a 2-kilometer (1.24-mile) radius of the store.

The store is designed to “give residents in the neighborhood an upgraded omni-channel experience,” said Elliot Dickson, Walmart China's hypermarket senior vice president.

The company tested the self-billing and payment machine in several Walmart hypermarkets in Shenzhen for two months, and has had positive feedback from customers, it said. Some 30% of shoppers chose the cashier-less way of payment, and 95% of them said they would use that method in the future.

The cashier-less concept is beginning to be rolled out by many big retailers in China, with e-commerce giants including Amazon.com and Alibaba showcasing similar stores.

Walmart said it plans to open five more small omni-channel stores in Shenzhen, Guangzhou and Dongguan cities this year.

Contact reporter Coco Feng (renkefeng@caixin.com)