Walmart Inc reported a quarter of strong performance in China, with net sales in the country surging 21.8 percent to $6.1 billion on the back of Sam's Club's rapid expansion and accelerating online demand.

The US retail giant on Nov 20 posted global revenue of $179.5 billion for the fiscal third quarter, up 6 percent in constant currency, while adjusted operating income rose 8 percent to $7.2 billion. E-commerce continued to be a major driver, growing 27 percent worldwide.

Its business in China again outperformed Walmart's global averages. The company's net sales reached $6.1 billion, up 21.8 percent and comparable sales in the market climbed 13.8 percent, while e-commerce sales jumped 32 percent and accounted for more than half of Walmart China's total sales.

Gross margin slipped amid changes in business mix, but stronger sales, a favorable shift in channels and higher operational efficiency helped lower the cost ratio and lift operating profits, the company said.

Much of the momentum continued to come from Sam's Club, Walmart's membership warehouse chain, which is emerging as one of the company's strongest growth engines globally.

CFO John David Rainey said in the earnings call that sales in China rose 22 percent in the quarter, reflecting "ongoing strength at Sam's Club" and e-commerce growth of "more than 30 percent".

Sam's recorded double-digit transaction growth during the quarter and added eight new clubs in the past 12 months, including one opening in the third quarter.

On Nov 21, Sam's Club China opened a new store in Beijing's Changping district — the city's fifth and the company's 61st nationwide. The retailer is preparing two more openings in December in Shanghai and Guangzhou, Guangdong province. Each of the stores in Jiaxing of Zhejiang province, Hefei of Anhui province, Zhongshan of Guangdong province and Yangzhou of Jiangsu province is the first entry in each city.

Walmart China said 2025 will be Sam's Club's busiest expansion year in China, with 10 new stores planned — the most it has ever opened in a single year. The chain expects to maintain a rapid expansion pace beyond 2025 as its high-income, high-frequency membership model gains traction.

Douglas McMillon, president, CEO & director of Walmart Inc, said during the Q3 earnings call: "The team in China is delivering orders fast. Nearly 80 percent of digital orders arrive in under an hour. In digital retail, China is more advanced than any other market we operate in."

He said: "In October, I got to visit three Chinese cities. In Hefei, a city of about 10 million people, we visited a relatively new Sam's Club that was outstanding. We now have a healthy pipeline of new clubs coming."

However, the retailer has recently faced consumer backlash over product selection and presentations. The retailer's app redesign, which altered product images from real photos to retouched "art shots" earlier this year, sparked backlash from consumers.

Earlier this summer, online users on social media platforms criticized the inclusion of mass-market snacks such as Orion pies, Weilong Konjac treats and Panpan walnut puffs — items widely available in regular supermarkets. Many consumers questioned whether these products aligned with Sam's Club's premium brand image and stringent quality standards.

The controversy highlights the growing tension between Sam's Club's high-end positioning and evolving consumer expectations in China's rapidly changing retail landscape.

Walmart's performance comes as China's retail sector undergoes rapid transformation. The rise of instant delivery, the emergence of new community retail ecosystems, and a reshaping of online-offline models have intensified competition, prompting global players to localize more deeply.

Sam's warehouse network — offering high repeat purchase rates, high basket sizes and low operating costs — has become a key differentiator. The infrastructure enables profitable online fulfillment, broadens geographic reach and boosts membership renewal and engagement by increasing purchase frequency.

Walmart has identified urban middle-income households and single consumers as its core customer groups in China. Its strategy centers on three pillars: high-quality fresh and packaged foods; curated fast moving consumer goods and non-food essentials; and stable everyday low prices and omnichannel convenience.

To get closer to consumers, Walmart is scaling its community store format — smaller, curated and neighborhood-focused outlets. Its fourth community store opened in Bao'an district in Shenzhen, Guangdong province, on Sept 13, following multiple rounds of testing and refinement. The format is now entering scaled rollout in the city.

Walmart is also elevating its private labels. On Nov 17, its Marketside brand unveiled a full brand refresh, releasing nearly 1,000 new or upgraded products.