Steven Millward · · 2 min readWalmart sells its Chinese ecommerce store to Alibaba arch-rival
A Walmart in the US. Photo credit: Mike Mozart.
American retail giant Walmart has sold off its Chinese ecommerce store to JD, China’s second biggest online shopping company, the two firms announced overnight.
Walmart’s Yihaodian is China’s biggest online store specializing in groceries and one of China’s top 10 largest ecommerce sites. The deal sees JD taking control of Yihaodian, which will remain its own brand, while at the same time JD can save money by tapping into Yihaodian’s supply chains.
The groceries site began as a Chinese startup.
In exchange for Yihaodian, Walmart gets a five percent stake in JD worth nearly US$1.5 billion.
The groceries store began as a Chinese startup which Walmart first invested into in 2012, taking control with a 51 percent stake. The firm last year paid US$760 million to buy up the rest of the business.
JD is Alibaba’s arch-rival in China. The Amazon-esque site will likely use the Yihaodian acquisition to increase the pressure on Alibaba’s own moves into food and groceries, such as with the Tmall Supermarket and Tmall Global for imported food. JD announced today that the deal means the store’s “customers will gain access to a wide range of new and imported items from Walmart and Sam’s Club.”
Imported foods represent the newest front in China’s fierce ecommerce battle. Along with other items like makeup from Korea and handbags from Italy, it’s formed a new segment called cross-border ecommerce. All that cross-border spending by China’s online shoppers will amount to US$85.8 billion by the end of 2016 – nearly triple the US$30 billion tally in 2014, according to recent data from Emarketer.
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Editing by Kylee McIntyre
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