Trillion-dollar giants launch "Tech Alley Battle" in the Chinese market

During the Spring Festival (February 19), Walmart announced its fiscal year 2026 and Q4 earnings.

For fiscal year 2026 (ending January 31, 2026), Walmart achieved total revenue of $713.2 billion, up 4.7% year-over-year (excluding currency fluctuations, total revenue was $715.9 billion, up 5.1%). Full-year adjusted operating profit was $31.1 billion, a 10.5% increase.

The fourth quarter also performed strongly, with total revenue of $190.7 billion, up 5.6% year-over-year (excluding currency fluctuations, $189.3 billion, up 4.9%). Adjusted operating profit for the quarter was $8.6 billion, up 10.5%.

This performance not only exceeded market expectations but also marked Walmart’s successful transformation from a traditional retailer into a technology-driven company.

Walmart’s new CEO John Furner stated during a conference call that investments in technology are paying off. Automation initiatives are reducing labor costs, increasing productivity, and improving delivery speed.

Currently, about 60% of Walmart stores receive goods from automated distribution centers, and roughly half of e-commerce fulfillment centers are fully automated.

By the end of 2025, Walmart announced it would move its stock listing from the New York Stock Exchange to the more tech-focused NASDAQ, connecting with global tech capital and raising resources for AI transformation. Since Furner took office, Walmart has invested billions of dollars in supply chain automation, improving fresh produce quality, delivery speed, and inventory forecasting.

On February 4, Walmart’s market value surpassed $1 trillion, becoming the first traditional retailer to reach this milestone and breaking into the trillion-dollar club dominated by tech giants like NVIDIA, Apple, Microsoft, and Amazon. The core drivers are growth in e-commerce, advertising efforts, and forward-looking AI investments.

Walmart China has become the most prominent growth driver this fiscal year.

In FY2026, Walmart China’s net sales are approximately $24.7 billion, a 21.67% increase from $20.3 billion in FY2025.

In Q4, Walmart China achieved net sales of $6.1 billion, up 19.3%, maintaining rapid growth.

Sam’s Club’s explosive growth is the key driver of performance in China. In 2025, it added 10 new stores, including six in the fourth quarter, setting a record for expansion speed. Transaction volume doubled, demonstrating the strong appeal of the membership model in China.

Despite recent controversies over quality control, product selection, and service experience, many Sam’s members told observers that it still represents high-quality supermarkets, and they remain willing to renew their memberships.

Notably, Walmart’s transformation in China has reached a new stage. Walmart China is shifting toward urban middle-class families, complementing Sam’s middle-income households.

The narrative of “big-box stores retreating, Sam’s stepping in” is being rewritten by Walmart China, with community stores gaining importance. This shift reflects Walmart’s deep insights into urban Chinese lifestyles.

As the decline of large-format stores and the success of Sam’s Club continue, Walmart needs a new model to fill market gaps and serve a broader customer base. Community stores, characterized by “small, refined, close,” have emerged. These stores are about 500 square meters, with around 2,000 SKUs, and are precisely located within a “10-minute walking circle.”

Walmart China’s Senior Vice President Zhu Jun revealed that the company even calculates how many intersections customers must pass through to ensure stores are located at the optimal “center” within walking distance. This near-obsessive precision reflects Walmart’s renewed understanding of community retail: not just a smaller version of traditional stores, but a complete business model reconstruction based on specific scenarios.

Behind this business model overhaul is also the upgrade of its private brand, WoJixian. In just one year, WoJixian’s product range has expanded from dozens of SKUs to nearly a thousand, targeting urban middle-class families and singles, often called “Sam’s alternative.”

In December 2025, Walmart opened four new community stores in Shenzhen. Walmart stated that after market validation, its community store model has entered a phase of accelerated scaling and dense deployment. These stores no longer aim for the traditional “one-stop shopping” of large-format stores but focus on high-frequency, daily needs like “five meals a day,” becoming a “nerve ending” connecting Walmart with community life.

Currently, Walmart China has 11 community stores, all located in Shenzhen, its main base. While this expansion pace isn’t fast by industry standards, Walmart seems eager to try more in Shenzhen.

In this “test field,” Walmart has partnered with Xiaohongshu to open “Marsu Stores.” On the product side, they have established a “co-creation” model that combines consumer insights and collaborative product development, with Walmart’s private brand WoJixian leading the effort, launching nearly 20 co-branded products.

Industry insiders told observers that Xiaohongshu has become an important pathway for many retail brands’ product development, providing direct insights into consumer trends and feedback.

The collaboration between Walmart and Xiaohongshu is seen as a future upgrade for retail. Especially as losing young customers has become a pain point, attracting Generation Z consumers is a key challenge for Walmart.

Walmart China’s Senior Vice President Zhu Jun said that this partnership helps Walmart “closer align with customers’ lifestyles and integrate more agilely into daily scenarios.”

The impressive financial report released during the Lunar New Year marks a powerful start to its Year of the Horse. It showcases a retail giant in the midst of a major transformation: on one hand, reaching a trillion-dollar valuation and embracing automation and AI ambitions; on the other, meticulously cultivating in China’s complex market—Sam’s Club attracting middle-class families with scale and quality, while new community stores and cross-border collaborations like “Marsu” aim to integrate into urban daily life with smaller, trendier touchpoints.

This reveals Walmart’s current dual challenge: globally, it must prove itself as a tech company; in China, it needs to demonstrate that it remains the most attuned to local lifestyles. Its partnership with Xiaohongshu is a frontier experiment in this effort, attempting to convert online consumer interests into trusted offline products and experiences, bridging “certainty” in supply chains with “possibility” in consumer trends.