Walmart China has made a significant leadership change. Effective September 2, Zheng Shuohuai has stepped into the role of Senior Vice President at Walmart China and taken over as COO of Sam’s Club. Along with this, Zheng will continue to lead the membership team at Sam’s Club, while his predecessor, Fang Xiaofeng, transitions to the role of Chief People Officer at Walmart China.
Zheng, who joined Walmart China in March 2022 as Senior Vice President of Strategy and Real Estate, brings a strong consulting background. Before taking on his current role, he was a global partner and head of retail for Greater China at Bain & Company. His career parallels that of Walmart China’s CEO, Zhu Xiaojing, who also previously held a leadership position at McKinsey & Company.
According to reports from 36Kr, Zheng has garnered praise for his contributions to expanding Sam’s Club’s store footprint and cloud warehouse network.
Sam’s Club has defied broader retail trends in China, showing notable growth. In 2023, the retailer posted approximately RMB 80 billion (USD 11.3 billion) in sales. The latest Walmart China financial report, released in August, revealed that the company’s net sales for the second fiscal quarter reached USD 4.6 billion—a year-on-year increase of 17.7%. This continues two years of robust growth, with Sam’s Club playing a key role. According to Walmart CFO John David Rainey, some of the company’s highest-grossing stores, in terms of total revenue, are Sam’s Club locations in China.
To date, Sam’s Club has opened 48 stores across 25 cities in China, with an array of online services such as one-hour express delivery, citywide delivery, and nationwide delivery rolled out alongside the brick-and-mortar expansion. By comparison, Costco, its closest competitor, had 19 stores in China by the end of fiscal 2023.
Since 2018, Sam’s Club has been building out its cloud warehouse network to support rapid delivery services. This hybrid model has enabled the retailer to achieve near-complete coverage in key cities. While its physical stores offer around 4,000 SKUs, the cloud warehouses feature a more curated selection of approximately 1,000 high-repeat-purchase items, tailored for quick commerce.
The momentum behind Sam’s Club’s cloud warehouse expansion has only accelerated. In August alone, new warehouses opened in Dongguan, Shaoxing, and Wenzhou, with many reporting near-immediate fulfillment upon launch. Industry insiders estimate that Sam’s Club now operates nearly 500 frontend warehouses across China, with each processing around 1,000 orders and an average transaction value exceeding RMB 200 (USD 28.2).
36Kr also reported that Sam’s Club’s e-commerce operations have been realigned to report to Zhang Qing, chief merchandising officer of Walmart China. Previously, the e-commerce business reported to the COO. Now, Zheng will oversee offline operations, while Zhang takes charge of its online channels.
E-commerce has become a critical growth engine for Sam’s Club in China. In fiscal 2023, nearly 47% of its revenue came from online sales. The first half of fiscal 2024 continued this trend, with Rainey stating during the second-quarter earnings call that membership growth has driven double-digit sales increases in China, with nearly half of the sales coming from online channels. Additionally, one-hour express delivery orders grew by 28% in the quarter, totaling 59 million.
Sources familiar with Sam’s Club told 36Kr that the e-commerce team focuses on product features, page design, online promotions, and themed events, working closely with the procurement team to ensure product selection aligns. One insider noted that, early on, collaboration between procurement and e-commerce was lackluster. It wasn’t until late 2021, when online sales surged, that some products began outperforming their offline counterparts—prompting improved internal cooperation.
With the recent organizational changes, expectations are that Sam’s Club’s procurement and online product strategies will become more closely aligned.
Walmart’s latest earnings report emphasizes three key priorities: growth, profitability, and returns. By putting growth first, Walmart aims to strengthen its omnichannel business model, offering customers the shopping experiences they desire. This strategy includes increasing membership, accelerating e-commerce sales, and expanding its omnichannel footprint. Yet, whether Sam’s Club can deepen its penetration in the Chinese e-commerce market under this new structure remains an intriguing question.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Ren Cairu for 36Kr.