When U.S. supercenter chain Walmart opened its first Chinese outlet in Shenzhen in 1996—five years before China joined the World Trade Organization—the retail landscape in the country looked vastly different. With no large-scale hypermarkets, shoppers rose at dawn to snag the freshest produce at local wet markets.
Yet in the past 30 years, China’s rising middle class and deep manufacturing capabilities have given rise to one of the world’s most dynamic, and competitive, consumer markets. And the relentless domestic competition has proved to be a double-edged sword for retail companies: Those that can’t adapt quickly are stamped out, while the most successful firms become hyperefficient, agile, and globally competitive. Walmart, for one, saw its China business grow by 20.7% last quarter. That’s faster than Walmart’s other global businesses (Walmart U.S. saw sales grow by 2.6%), and bucks a broader trend of sluggish retail sales within China.
