Walmart China unveiled two new next-generation stores in Kunming, Yunnan province, in December, marking a major step in the retailer's transformation strategy.

Walmart aims to cater to precise consumer needs by enhancing product offerings, expanding omnichannel capabilities, and creating long-term value to foster deeper customer loyalty, said the company.

The new generation stores integrate customer-driven design principles across 16 themed sections, reflecting everyday consumption scenarios such as breakfast, hot pot, travel, pet care and global products.

New features include areas for fruit cutting, Western-style dining, grab-and-go meals and marinated cooked foods, addressing customer demand for convenient, ready-to-eat options.

To enhance the shopping experience, the stores feature lower shelves, open layouts and informative displays on topics such as fragrance usage, seafood quality, and cookware maintenance. These changes aim to create a more immersive and educational shopping environment while showcasing products in relatable life scenarios.

The keys to its product transformation are high-quality three-meal solutions, exclusive low-cost products from leading brands, and unique "treasure" items. Fresh food remains a strategic priority.

Walmart's fresh bakery, for instance, has upgraded its products to include options made with 100 percent cream, offering over 30 baked goods at affordable prices.

Other highlights include ice-fresh Australian Angus beef, transported through a strict cold chain process, and globally sourced frozen seafood such as crab and shrimp, preserved with advanced quick-freezing technology for maximum freshness, said the company.

To meet the needs of smaller households, Walmart has expanded its selection of convenient meal solutions, including cooked dishes, regional specialties and single-serving soups.

For example, traditional noodle meat steamed buns, combines convenience with traditional flavor.

Walmart continues to integrate its brick-and-mortar stores with digital platforms to enhance omnichannel shopping.

Walmart's investment in store transformation is part of its efforts to accelerate its presence in China.

These next-generation stores are not only an example of Walmart's evolving retail model, but also a step toward redefining the shopping experience for Chinese consumers to drive further growth.

Walmart group's sales in modern trade have steadily increased, with the strong performance of its membership store Sam's Club.

Sam's Club's sales growth in lower-tier cities is significantly higher than in larger cities, indicating increasing demand for the membership store model in lower-tier markets, said Kantar Worldpanel China.

The new generation stores of Walmart echo the industry trend, which has continued to show fragmentation, with small supermarkets and convenience stores maintaining their excellent performance, said Kantar.

Increased consumption in the lower-tier market has also contributed significantly to the overall growth of modern trade, which increased by 3.6 percent in the first three quarters. Chinese consumers have also maintained their proximity shopping habits. The fierce competition in offline channels and the integration of multiple formats have driven further fragmentation of the retail market.

Compared to the same period in 2023, the market share of the top 10 retailers in modern trade collectively declined by 1.3 percentage points in the first three quarters, indicating further fragmentation of the Chinese retail market. Major retailers are actively facing challenges and are exploring new development strategies including premiumization, digitalization and multiformat operations.

For example, some retailers are transforming and innovating themselves by accepting adjustments through Pangdonglai, a well-known commercial retail enterprise or self-improvement. Others choose to expand quickly. In December, Hema Fresh, the supermarket chain under Alibaba Group, launched more than 10 new stores.

According to the "2024 Hema Consumption Trend Insight Report", Hema is expected to open 72 additional stores before Spring Festival, nearing a total of 430 stores across the country. This rapid expansion, averaging a new store opening every five days, marks the fastest growth rate Hema has achieved in the past five years.