JD.com Inc’s partnership with Wal-Mart Stores Inc will arm it with more ammunition to take on Alibaba Group Holding Ltd, giving the Beijing-based company wider access to online groceries and more resources to expand in eastern China, experts said. JD, a leading e-commerce platform in China, said on Monday [20 June 2016] it would take ownership of Yihaodian, an online marketplace run by Wal-Mart, which in return, will hold a 5 percent stake in the Chinese online major…Full Article: ECNS.cn June 2016

Key Points

  • As part of the deal, JD.com (backed by Tencent Holdings) will open an online store for Walmart’s Sam Club. Both companies will also cooperate on logistics (supply chain and delivery services).
  • As of early 2016, Alibaba’s Tmall had 58% share of China’s e-commerce market, while JD.com had a 23% market share.

ChinaAg Comments

  • As of early 2016, Walmart has developed three brands in China including its hypermarket series (420 stores), Sam’s Club stores (12), and the e-commerce site Yihaodian (~130 million registered users).
  • In November 2015, Walmart China announced plans to open new stores in Inner Mongolia, Yunnan, Shandong, Fujian, Hubei and Guangdong. During the same month, JD.com sued Alibaba in a Beijing court over unfair business practices. JD.com accused Alibaba of “forcing merchants” to exclusively sell/distribute products from a single e-commerce site for promotional marketing/activities.
  • In October 2015, China Resources SZITIC, a subsidiary of China Resources Corp, announced it will its 35% stake in 21 Wal-Mart Stores in China for approximately CNY 3.35 billion (US$523.4 million). China Resources SZITIC is a subsidiary of China Resources Corp.
  • In August 2015, JD.com purchased a 10% stake in Yonghui Superstores. Established in 2001 and headquartered in Fuzhou, Fujian Province, Yonghui operates 460 medium-sized supermarkets all over China (as of 2015). During the same month, Pepsi announced it would market a new dairy drink, Quaker High Fiber Oats Dairy, via JD.com, a Chinese e-commerce site. It was Pepsi’s first instance of launching a new product exclusively on an e-commerce site not based in the USA.
  • In July 2015, Wal-Mart China bought out the remaining 49% of Yihaodian, taking full control (100%) of the e-commerce retail company.
  • In June 2015, Agriculture and Agri-Food Canada signed an agreement with the Chinese e-commerce site JD.com in Beijing. As a result, JD.com will launch a page dedicated to selling Canadian agri-food and fish and seafood products within the next year.
  • In March 2014, Tencent Holdings (internet and tech investment company) purchased a 15% stake in JD.com.
  • In October 2012, Wal-Mart increased its stake in Yihaodian to more than 51%.
  • In May 2011, Wal-Mart acquired a minority stake in Yihaodian.
  • Founded in 2008 and headquartered in Shanghai, Yihaodian is an e-commerce grocery website that has expanded to include household appliance and clothing. In 2011 and 2012, Wal-Mart bought increasing stakes in the company. As of 2014, the company served more than 100 Chinese cities (1-2 day delivery service). In July 2015, the company was bought out by Wal-Mart.
  • Founded in 1998 and headquartered in Beijing, Jingdong Mall (aka JD.com) is one of China’s largest e-commerce platforms. In May 2014, the company was listed on New York’s NASDAQ Stock Exchange (NASDAQ:JD). The company’s original focus was electronics.
  • In 1996, Walmart opened its first store in Shenzhen, southern China.

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