(Yicai Global) June 7 -- Tencent Holdings and Walmart China have agreed to collaborate on digital and smart retail in the world's second-largest economy, a move that represents the tech giant's further foray into the business, while helping the world's largest brick-and-mortar retailer deepen its digital footprint in China.
The partners will bring their respective advantages to play in better customer experiences, targeted marketing, payment services and value-added membership, Hong Kong-based Phoenix TV reported. The two also said they will jointly develop a software covering all possible consumption scenarios.
Cooperation between the Chinese tech giant and the US retail colossus is nothing new. In March, Walmart's China unit experimented with smart stores using Tencent's mini program Walmart Scan and Go, which customers can use to pay for goods by scanning them with a smartphone-installed app.
The companies now plan to combine Shenzhen-based Tencent's technology with Walmart Stores' personalized services to digitalize the shopping experience, and aim to optimize Walmart Scan and Go and innovate payments with facial recognition and self-service through Tencent's WeChat Pay.
In marketing, they intend to push more precision messages via WeChat, small apps, social ads and other online platforms. The pair will also work together to upgrade the digital membership ecosystem of Sam's Club, Bentonville-based Walmart's members-only retail warehouse chain, linking it with Tencent's to build the customer base.
Walmart will also promote better interaction between staff members and between employees and customers through WeChat Enterprise, a service developed by Tencent to allow companies to use WeChat for internal messaging.
Walmart's sales in China climbed the most in five years in the first quarter, gaining 6 percent from a year earlier, while same-store takings rose 4 percent. Sales via its online store on JD.com have surged five-fold since it was launched in the middle of last year, which also helps to explain the company's motivation for joining forces with Tencent.
Walmart Scan and Go ran a two-month trial in one of its Shenzhen stores, and the penetration rate was 30 percent. It is now available at stores in 28 cities and is expected to cover 400 stores across China by the end of this year.
Editor: Mevlut Katik