Ryan McDaniel, the senior vice president of Walmart China’s supply chain, announced a 1 million-square-foot warehouse in Dongguan, China, is part of $1.16 billion Walmart plans to invest in logistics in China.
The Walmart Huanan Fresh Food Distribution Center, which opened in March, serves more than 100 stores in the Guangdong and Guangxi regions and can ship up to 165,000 boxes per day.
Walmart will build 10 or more additional warehouses in China in the next 10-20 years, a Walmart spokesperson told Supply Chain Dive.
Walmart is taking big swings in China, but this facility represents Walmart’s largest investment there since it entered the market 23 years ago. The new facility will reach slightly less than one-quarter of Walmart’s 443 store network in the country.
China’s sheer size demands investment to compete, but beyond scale, China’s grocery market is extremely competitive and shoppers have converted to online grocery shopping at much faster rates than in the U.S.
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 fulfillment to JD.com’s front-end e-commerce platform. Walmart and JD.com also invested $500 million in Chinese delivery provider Dada-JD Daojia last year.
With Monday’s announcement, the company is drawing attention to its food safety prowess as well as its growing logistical might. Walmart’s emphasized the technology in the new facilities that will ensure the different storage temperatures remain constant — IoT applications monitor the temperature of equipment like forklifts and the facility as a whole, the company noted in its WeChat post.