June 23, 2016
Walmart Sells Chinese E-Commerce Marketplace, Partners with JD.com
June 23, 2016
Walmart has abandoned its plans to operate an independent e-commerce entity in China, after acquiring its own online marketplace a year ago. The retailing giant this week unveiled a partnership with JD.com under which it will sell its Yihaodian e-commerce site to the Alibaba competitor, but will act as a seller on the site and operate Yihaodian’s direct sales business. Also, as part of the agreement, Sam’s Club China will open a flagship store on JD.com. In return, Walmart received a 5-percent stake in JD.com, which accounts for about 25 percent of e-commerce sales in China compared to around 55 percent for Alibaba.
“We’re excited about teaming up with such a strong leader in JD.com, and the potential that this new relationship creates for customers in China, as well as for our businesses,” said Doug McMillon, president and CEO of Walmart. “JD.com shares similar values in making the lives of customers better. It also has a very complementary business and is an ideal partner that will help us offer compelling new experiences that can reach significantly more customers.”
McMillon and JD.com CEO Richard Liu both alluded to the quality products the agreement would make available to Chinese consumers from Walmart on Yihaodian and from Sam’s Club on JD.com. While e-commerce is exploding in China, consumers there have challenges trusting domestic retailers to deliver quality products (Alibaba evolved as an escrow service to combat the same problem). As a trusted global brand, Walmart addresses that need for JD.com. And, in a retailing landscape that has become increasingly cutthroat, Walmart benefits from aligning with a domestic powerhouse.