E-commerce sales soar for Walmart in China market

With all the frost in US-China relations, a major American company has found some heat.

Walmart, the discount retailer, reported Tuesday that net e-commerce sales in China grew 104 percent from a year ago in the three months ended July 31.

That beats the 97 percent growth posted for net e-commerce sales in the United States. The Bentonville, Arkansas-based company's fiscal second-quarter results also beat analyst expectations on revenue and earnings per share.

Walmart also said its Sam's Club membership stores saw double-digit comparable sales growth in China.

Walmart has been investing heavily in China, from opening new Sam's Club stores to partnering with Dada, a local grocery-delivery platform, CNBC reported. Earlier this month, Dada announced that Walmart's 400-plus stores in China have been connected to the online platform, which tout delivery within an hour.

E-commerce for Walmart expanded by more than 200 percent in Canada, Mexico and Central America, according to the earnings release.

"Canada, China and Mexico led the way, as customers choose one-stop shopping and omnichannel solutions," CEO Douglas McMillon said on the company's earnings call Tuesday.

"During these challenging times, we continued to execute the strategy of building strong local businesses powered in China by Walmart and announced additional investments in China and India focused on positioning the portfolio for growth," CFO Brett Biggs said on the call.

On Wednesday, McMillon also called for collaboration between the US and China.

"It is our hope that these countries will work together, this administration and in years to come, to find ways to have a collaborative relationship," McMillon told Mornings with Maria on Fox News. "We want to be able to do business in China. I know a lot of American businesses and farmers want to as well."

The executive also said that "about two-thirds of what we sell is made in the United States", which is a boost for American manufacturers' products overseas.

Jeffrey Williamson, director of California State Trade Expansion, told China Daily that "there are several strategic moves that are benefiting Walmart in China — and their growth in e-tail".

"Trust, price, selection and convenience are important drivers for online shopping and Walmart has already gained 'trust' through its physical-store presence in China for decades, and has been positioning itself with attractive prices and vast selection (including both imports and popular local goods)," said Williamson, who is also a professor at the Inland Empire Center for Entrepreneurship at California State University, San Bernardino.

"The partnership with JD.com provides important synergies for both JD to extend to offline, and Walmart to extend online, which may be contributing to the results," he said.

Walmart's profit jumped by 79 percent in the three months through June 30, as Americans, spending more time at home during the coronavirus pandemic, ordered more goods online.

The company reported earnings of $6.48 billion, or an adjusted $1.56 per share, better than the $1.25 a share that Wall Street analysts surveyed by Refinitiv were expecting, according to CNBC. Total revenue rose 5.4 percent to $137.7 billion, ahead of the $135.48 billion consensus.

Walmart also was No. 1 in the Fortune Global 500 list of the world's largest companies released last week. The number of Chinese companies on the list exceeded American companies for the first time.