Wal-Mart Winnsboro, SC January 2016
Image Source: MikeKalasnik
Richard Bell

Wal-Mart strikes strategic alliance worth $1.5bn with China’s JD.com

US retail giant Wal-Mart Stores Inc has confirmed plans to sell Yihaodian, it’s Chinese e-commerce business, to China-based digital retailer JD.com Inc in a deal worth $1.5bn (c.£1.2bn).

In exchange for Yihaodian, JD.com will give Wal-Mart a 5% stake in its business by issuing it with around 145m new class A shares, worth around $1.5bn, in a new strategic alliance designed to boost the US company’s access to the Chinese market.

Yihaodian, which focuses on grocery sales and caters to an affluent female demographic, saw Wal-Mart first acquire a stake in 2011 before taking on full ownership in July 2015, according to Reuters.

By partnering up with JD.com, which is the second-biggest online retailer in China behind Alibaba Group, Wal-Mart has given the Chinese firm control of the Yihaodian website and brand. Wal-Mart, meanwhile, will continue operating Yihaodian’s direct sales business and will sell on its marketplace.

Further to the deal, the Chinese arm of American retail warehouse chain Sam’s Club will launch a flagship store on JD.com and take advantage of its delivery network.

Wal-Mart’s Chinese store network will be listed as a preferred retailer on O2O JV Dada, JD.com’s crowd-sourced platform.

Speaking to Reuters, Brian Yarbrough, an analyst with financial services firm Edward Jones, said the deal gives Wal-Mart a more cost-effective way to get its products and brand in the marketplace by teaming up with a big, experienced player.

He continued: “It doesn’t mean that they’ve pulled away, but to me it tells me they are trying to make smarter investments.”

Looking to promote your product or service? Bdaily Marketing can help you reach a regional business audience. Request our latest Media Pack →

Our Partners

Join the discussion as a guest or using , or Google

Top Ten Most Read