Walmart enters e-commerce alliance with JD.com

Eden Estopace
21 Jun 2016
00:00

Walmart Stores has formed an e-commerce and retail alliance with China's online direct sales company JD.com.

Under the agreement, JD.com will take ownership of Walmart's China e-commerce website Yihaodian, its platform assets, the app and the brand. Walmart, however, will continue to operate Yihaodian's direct sales business and will be a seller on the Yihaodian marketplace. It will also retain ownership and will continue to operate its own physical stores.

The deal will give Walmart 5% of JD.com's newly issued Class A ordinary shares but the two companies said they will work together to grow the brand and the business.

Walmart acquired full ownership of Yihaodian from financial services group Ping An last year. At the time of its purchase, it said the e-commerce website has more than 8,000 products, covering 14 product lines including food and beverage, nutrition and health care, consumer electronics, clothing and home goods.

Doug McMillon, president and CEO of Walmart, said in a statement that Walmart and JD.com have very complementary businesses and thus, ideal to partner.

"We also look forward to offering customers a tremendous number of quality imported products not previously widely available in China through Walmart and Sam's Club," he added.

Sam's Club China will open a flagship store on JD.com and will offer same- and next-day delivery through JD.com's warehousing and delivery network that can serve approximately 600 million consumers.

Richard Liu, CEO of JD.com, said Sam's Club's unique, high-end product selection meets the demand from China's increasing affluent consumers for high-quality, imported products and has already proven popular in the Chinese cities where it has stores.

Meanwhile, Walmart's China stores will be listed as a preferred retailer on JD.com's O2O JV Dada, China's largest crowd-sourced delivery platform, which would allow customers to order fresh food and other items from Walmart stores for 2-hour home delivery.

The US retail giant announced in December that as of end 2015, it has 433 stores across China and plans to add 115 more in the next three years.

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