Walmart China plans to invest 8 billion yuan (US$1.2 billion) in logistics and supply chains in the next 10 to 20 years, the China Daily quoted Ryan McDaniel, Senior Vice President of Walmart China Supply Chain as saying. McDaniel said that in addition to building the first customised perishable food distribution centre, the South China Fresh Food Distribution Centre in Dongguan, the company plans to build or upgrade more than 10 logistics distribution centres over the next 10-20 years.
Walmart invested more than RMB 700 million to build the South China Fresh Food Distribution Centre, which has been in operation since March 2019. The Dongguan centre covers 33,700 square metres
and can cope with more than 4,000 types of merchandise that require freezing or constant temperatures. Its cold chain storage capacity in the region has increased five times.
Walmart requires vehicles to pre-freeze the cargo area before being loaded and temperatures of all vehicles are monitored during transportation to guarantee the quality of fresh goods quality and their delivery to a store.
First distribution centre in China to attain the BRCGS certification
South China Fresh Food Distribution Centre currently serves more than 100 Walmart stores in South China’s Guangdong province and Guangxi Zhuang autonomous region, with daily distributing capacity of up to 165,000 cases of products.
The new fresh food distribution centre passed the Brand Reputation through Compliance (BRCGS) Warehousing and Distribution Global Standard Certification, making it the first distribution centre in China’s retail industry to attain this certification.
A report by Supply Chain Dive said the facility, which represents Walmart's largest investment there since it entered the market 23 years ago, will reach slightly less than one-quarter of Walmart's 443 store network in the country, which includes small format Walmart stores, Sam’s Clubs and Walmart supermarkets.
Online grocery shopping gains ground fast
The report added that China's grocery market is extremely competitive, and shoppers have converted to online grocery shopping at much faster rates than in the U.S. Same-day delivery is expected in cities.
Walmart has partnered with JD.com for the last three years and the two expanded their partnership into food delivery earlier this year with Walmart providing the back-end fulfilment to JD.com's front-end e-commerce platform. Walmart and JD.com also invested US$500 million in Chinese delivery provider Dada-JD Daojia last year.
Nol van Fenema